IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Estimating the Effects of Global Patent Protection in Pharmaceuticals: A Case Study of Quinolones in India

  • Panle Gia
  • Pinelopi K. Goldberg
  • Shubham Chaudhuri

Under the Agreement on Trade-Related Intellectual Property Rights, the World Trade Organization members are required to enforce product patents for pharmaceuticals. In this paper we empirically investigate the welfare effects of this requirement on developing countries using data for the fluoroquinolones subsegment of the systemic anti-bacterials segment of the Indian pharmaceuticals market. Our results suggest that concerns about the potential adverse welfare effects of TRIPS may have some basis. We estimate that the withdrawal of all domestic products in this subsegment is associated with substantial welfare losses to the Indian economy, even in the presence of price regulation. The overwhelming portion of this welfare loss derives from the loss of consumer welfare. (JEL F13, L65, O34)

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

File URL:
Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.

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

Volume (Year): 96 (2006)
Issue (Month): 5 (December)
Pages: 1477-1514

in new window

Handle: RePEc:aea:aecrev:v:96:y:2006:i:5:p:1477-1514
Note: DOI: 10.1257/aer.96.5.1477
Contact details of provider: Web page:

More information through EDIRC

Order Information: Web:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Chin, J.C. & Grossman, G.M., 1988. "Intellectual Property Rigths And North-South Trade," Papers 143, Princeton, Woodrow Wilson School - Public and International Affairs.
  2. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1975. "Transcendental Logarithmic Utility Functions," American Economic Review, American Economic Association, vol. 65(3), pages 367-83, June.
  3. Richard G. Frank & David S. Salkever, 1997. "Generic Entry and the Pricing of Pharmaceuticals," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(1), pages 75-90, 03.
  4. Mattias Ganslandt & Keith E. Maskus & Eina V. Wong, 2001. "Developing and Distributing Essential Medicines to Poor Countries: The DEFEND Proposal," The World Economy, Wiley Blackwell, vol. 24(6), pages 779-795, 06.
  5. Kremer, Michael R., 1998. "Patent Buyouts: A Mechanism for Encouraging Innovation," Scholarly Articles 3693705, Harvard University Department of Economics.
  6. Michael Kremer, 1998. "Patent Buyouts: A Mechanism for Encouraging Innovation," The Quarterly Journal of Economics, Oxford University Press, vol. 113(4), pages 1137-1167.
  7. Lanjouw, Jean O. & Cockburn, Iain M., 2001. "New Pills for Poor People? Empirical Evidence after GATT," World Development, Elsevier, vol. 29(2), pages 265-289, February.
  8. Trajtenberg, Manuel, 1989. "The Welfare Analysis of Product Innovations, with an Application to Computed Tomography Scanners," Journal of Political Economy, University of Chicago Press, vol. 97(2), pages 444-79, April.
  9. Keith E. Maskus, 2000. "Intellectual Property Rights in the Global Economy," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 99, January.
  10. Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-90, July.
  11. Mazzoleni, Roberto & Nelson, Richard R., 1998. "The benefits and costs of strong patent protection: a contribution to the current debate," Research Policy, Elsevier, vol. 27(3), pages 273-284, July.
  12. Gene Grossman & Edwin L.-C. Lai, 2002. "International Protection of Intellectual Property," NBER Working Papers 8704, National Bureau of Economic Research, Inc.
  13. Nevo, Aviv, 1998. "Measuring Market Power in the Ready-To-Eat Cereal Industry," Research Reports 25164, University of Connecticut, Food Marketing Policy Center.
  14. McFadden, Daniel L., 1984. "Econometric analysis of qualitative response models," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 24, pages 1395-1457 Elsevier.
  15. Fink, Carsten, 2000. "How stronger patent protection in India might affect the behavior of transnational pharaceutical industries," Policy Research Working Paper Series 2352, The World Bank.
  16. Michael Kremer, 1997. "Patent Buy-Outs: A Mechanism for Encouraging Innovation," NBER Working Papers 6304, National Bureau of Economic Research, Inc.
  17. Goldberg, Pinelopi Koujianou, 1995. "Product Differentiation and Oligopoly in International Markets: The Case of the U.S. Automobile Industry," Econometrica, Econometric Society, vol. 63(4), pages 891-951, July.
  18. Diwan, Ishac & Rodrik, Dani, 1989. "Patents, appropriate technology, and North-South trade," Policy Research Working Paper Series 251, The World Bank.
  19. Donald W. K. Andrews & Moshe Buchinsky, 2000. "A Three-Step Method for Choosing the Number of Bootstrap Repetitions," Econometrica, Econometric Society, vol. 68(1), pages 23-52, January.
  20. Helpman, Elhanan, 1993. "Innovation, Imitation, and Intellectual Property Rights," Econometrica, Econometric Society, vol. 61(6), pages 1247-80, November.
  21. Ellison, S & Cockburn, I & Griliches, A & Hausman, J, 1996. "Characteristics of Demand for Pharmaceutical Products : an Examination of four Cephalosporins," Working papers 96-24, Massachusetts Institute of Technology (MIT), Department of Economics.
  22. Jean O Lanjouw, 2003. "The Introduction of Pharmaceutical Product Patents in India: Heartless Exploitation of the Poor and Suffering?," Levine's Working Paper Archive 618897000000000598, David K. Levine.
  23. Guifang Yang & Maskus, Keith E., 2003. "Intellectual property rights, licensing, and innovation," Policy Research Working Paper Series 2973, The World Bank.
  24. Jerry A. Hausman, 1994. "Valuation of New Goods under Perfect and Imperfect Competition," NBER Working Papers 4970, National Bureau of Economic Research, Inc.
  25. Hausman, Jerry A & Leonard, Gregory K, 2002. "The Competitive Effects of a New Product Introduction: A Case Study," Journal of Industrial Economics, Wiley Blackwell, vol. 50(3), pages 237-63, September.
  26. Z. John Lu & William S. Comanor, 1998. "Strategic Pricing Of New Pharmaceuticals," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 108-118, February.
  27. repec:hhs:iuiwop:552 is not listed on IDEAS
  28. Wright, Brian Davern, 1983. "The Economics of Invention Incentives: Patents, Prizes, and Research Contracts," American Economic Review, American Economic Association, vol. 73(4), pages 691-707, September.
  29. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
  30. Deardorff, Alan V, 1992. "Welfare Effects of Global Patent Protection," Economica, London School of Economics and Political Science, vol. 59(233), pages 35-51, February.
Full references (including those not matched with items on IDEAS)

When requesting a correction, please mention this item's handle: RePEc:aea:aecrev:v:96:y:2006:i:5:p:1477-1514. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros)

or (Michael P. Albert)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.