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The Market Impacts of Pharmaceutical Product Patents in Developing Countries: Evidence from India

Listed author(s):
  • Mark Duggan
  • Craig Garthwaite
  • Aparajita Goyal

In 2005, as the result of a World Trade Organization mandate, India implemented a patent reform for pharmaceuticals that was intended to comply with the 1995 Trade-Related Aspects of Intellectual Property Rights (TRIPS). Exploiting variation in the timing of patent decisions, we estimate that a molecule receiving a patent experienced an average price increase of just 3-6 percent, with larger increases for more recently developed molecules and for those produced by just one firm when the patent system began. Our results also show little impact on quantities sold or on the number of pharmaceutical firms operating in the market. (JEL K33, L11, L13, L65, O14, O34, O38)

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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 106 (2016)
Issue (Month): 1 (January)
Pages: 99-135

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Handle: RePEc:aea:aecrev:v:106:y:2016:i:1:p:99-135
Note: DOI: 10.1257/aer.20141301
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  1. Raymond Fisman & Shang-Jin Wei, 2004. "Tax Rates and Tax Evasion: Evidence from "Missing Imports" in China," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 471-500, April.
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  12. Nancy T. Gallini, 2002. "The Economics of Patents: Lessons from Recent U.S. Patent Reform," Journal of Economic Perspectives, American Economic Association, vol. 16(2), pages 131-154, Spring.
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