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Patents and the Global Diffusion of New Drugs

Author

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  • Iain M. Cockburn
  • Jean O. Lanjouw
  • Mark Schankerman

Abstract

Analysis of the timing of launches of 642 new drugs in 76 countries during 1983-2002 shows that patent and price regulation regimes strongly affect how quickly new drugs become commercially available in different countries. Price regulation delays launch, while longer and more extensive patent rights accelerate it. Health policy institutions and economic and demographic factors that make markets more profitable also speed up diffusion. The estimated effects are generally robust to controlling for endogeneity of policy regimes with country fixed effects and instrumental variables. The results highlight the important role of policy choices in driving the diffusion of new innovations. (JEL I18, L11, L51, L65, O31, O33, O34)

Suggested Citation

  • Iain M. Cockburn & Jean O. Lanjouw & Mark Schankerman, 2016. "Patents and the Global Diffusion of New Drugs," American Economic Review, American Economic Association, vol. 106(1), pages 136-164, January.
  • Handle: RePEc:aea:aecrev:v:106:y:2016:i:1:p:136-64
    Note: DOI: 10.1257/aer.20141482
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Carsten Fink & Bronwyn H. Hall & Christian Helmers, 2018. "Intellectual Property Use in Middle Income Countries: The Case of Chile," NBER Working Papers 24348, National Bureau of Economic Research, Inc.
    2. OKADA, Yoshimi & NAGAOKA, Sadao, 2016. "Global spread of pharmaceutical patent protections: micro evidence from the international equivalents of the drug patents in Japan," IIR Working Paper 16-07, Institute of Innovation Research, Hitotsubashi University.
    3. repec:eee:wdevel:v:99:y:2017:i:c:p:15-27 is not listed on IDEAS
    4. Max Nathan & Anna Rosso, 2017. "Innovative events," Development Working Papers 429, Centro Studi Luca d'Agliano, University of Milano, revised 09 Oct 2017.
    5. Patricia Laurens & Christian Le Bas & Antoine Schoen, 2018. "Worldwide IP coverage of patented inventions in large pharma firms: to what extent do the internationalisation of R&D and firm strategy matter?," Post-Print hal-01725229, HAL.
    6. Gamba, Simona, 2017. "The Effect of Intellectual Property Rights on Domestic Innovation in the Pharmaceutical Sector," World Development, Elsevier, vol. 99(C), pages 15-27.

    More about this item

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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