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Optimal intellectual property rights protection during an international health emergency

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  • Brown, Drusilla K.
  • Norman, George

Abstract

We analyze policy options during an international health emergency to provide consumers in least developed countries access to patented life-extending pharmaceuticals. Reliance on property rights exhaustion is shown to be insufficiently flexible and costly to implement. By contrast, the optimal degree of price discrimination can always be achieved with a properly specified tariff. We identify a trade-off between patent length and the relevant optimal tariff rate. If the patent length is too short (too long) there must be an offsetting higher (lower) than socially optimal tariff rate. When patent length can be manipulated as an explicit policy tool we identify a clear policy assignment. The tariff rate should be set to achieve social welfare objectives while the patent length can be used to control the resource cost of innovation.

Suggested Citation

  • Brown, Drusilla K. & Norman, George, 2012. "Optimal intellectual property rights protection during an international health emergency," Regional Science and Urban Economics, Elsevier, vol. 42(6), pages 1009-1016.
    • Handle: RePEc:eee:regeco:v:42:y:2012:i:6:p:1009-1016
    DOI: 10.1016/j.regsciurbeco.2012.04.001
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    References listed on IDEAS

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    More about this item

    Keywords

    Intellectual property rights; AIDS; Developing countries; WTO;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • 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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