IDEAS home Printed from https://ideas.repec.org/a/gam/jijerp/v18y2021i3p1119-d488068.html
   My bibliography  Save this article

On Conflicts between Pharmaceutical Patent Protection and the Right to Life and Health Based on a Stackelberg Game

Author

Listed:
  • Chunming Xu

    (Shanghai International College of Intellectual Property, Tongji University, Shanghai 200092, China)

  • Debao Zhu

    (School of Management, Shanghai University, Shanghai 200444, China)

Abstract

To solve the conflict between pharmaceutical patent protection and the right to life, health and increased patient satisfaction, drug prices can be regulated by levying an excess profit tax. An optimal tax strategy was formulated that not only could lower drug prices and improve public health and welfare, but also considers companies’ earnings. The strategy was based on the Stackelberg game theory as a bi-level mathematical model. In the model, the government is the leader, with patient satisfaction as the main goal, and pharmaceutical companies are the followers, with maximum drug revenue as the goal. The results show that under the premise of ensuring sufficient incentives for patent holders, the optimized tax on excess profit can effectively compensate for the shortcomings of pharmaceutical patent protection, alleviate the failure of market regulation of drug prices, improve patient satisfaction, and increase total social welfare.

Suggested Citation

  • Chunming Xu & Debao Zhu, 2021. "On Conflicts between Pharmaceutical Patent Protection and the Right to Life and Health Based on a Stackelberg Game," IJERPH, MDPI, vol. 18(3), pages 1-13, January.
    • Handle: RePEc:gam:jijerp:v:18:y:2021:i:3:p:1119-:d:488068
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1660-4601/18/3/1119/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1660-4601/18/3/1119/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sternitzke, Christian, 2013. "An exploratory analysis of patent fencing in pharmaceuticals: The case of PDE5 inhibitors," Research Policy, Elsevier, vol. 42(2), pages 542-551.
    2. Swathi Iyengar & Kiu Tay-Teo & Sabine Vogler & Peter Beyer & Stefan Wiktor & Kees de Joncheere & Suzanne Hill, 2016. "Prices, Costs, and Affordability of New Medicines for Hepatitis C in 30 Countries: An Economic Analysis," PLOS Medicine, Public Library of Science, vol. 13(5), pages 1-22, May.
    3. Mehmet Sekip Altug & Ozge Sahin, 2019. "Impact of Parallel Imports on Pricing and Product Launch Decisions in Pharmaceutical Industry," Production and Operations Management, Production and Operations Management Society, vol. 28(2), pages 258-275, February.
    4. Eric W Bond & Kamal Saggi, 2017. "Price controls versus compulsory licensing: effects on patent-holders and consumers," Vanderbilt University Department of Economics Working Papers 17-00013, Vanderbilt University Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ivan Eryganov & Radovan Šomplák & Dušan Hrabec & Josef Jadrný, 2023. "Bilevel programming methods in waste-to-energy plants' price-setting game," Operational Research, Springer, vol. 23(2), pages 1-37, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rakesh Aggarwal & Qiushi Chen & Amit Goel & Nicole Seguy & Razia Pendse & Turgay Ayer & Jagpreet Chhatwal, 2017. "Cost-effectiveness of hepatitis C treatment using generic direct-acting antivirals available in India," PLOS ONE, Public Library of Science, vol. 12(5), pages 1-15, May.
    2. Dirk Czarnitzki & Katrin Hussinger & Bart Leten, 2020. "How Valuable are Patent Blocking Strategies?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 56(3), pages 409-434, May.
    3. Salas-Vega, Sebastian & Shearer, Emily & Mossialos, Elias, 2020. "Relationship between costs and clinical benefits of new cancer medicines in Australia, France, the UK, and the US," Social Science & Medicine, Elsevier, vol. 258(C).
    4. Aris Angelis & Huseyin Naci & Allan Hackshaw, 2020. "Recalibrating Health Technology Assessment Methods for Cell and Gene Therapies," PharmacoEconomics, Springer, vol. 38(12), pages 1297-1308, December.
    5. Joost W. Geenen & Cornelis Boersma & Olaf H. Klungel & Anke M. Hövels, 2019. "Accuracy of budget impact estimations and impact on patient access: a hepatitis C case study," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(6), pages 857-867, August.
    6. Sabine Vogler, 2019. "Fair prices for medicines? Exploring competent authorities’ and public payers’ preferences on pharmaceutical policies," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 46(3), pages 443-469, August.
    7. Jae Ho Jung & Dae Jung Kim & Kangho Suh & Jaeeun You & Je Ho Lee & Kyung In Joung & Dong Churl Suh, 2021. "International Price Comparisons of Anticancer Drugs: A Scheme for Improving Patient Accessibility," IJERPH, MDPI, vol. 18(2), pages 1-14, January.
    8. Sarah Garner & Andrew Rintoul & Suzanne R. Hill, 2018. "Value-Based Pricing: L’Enfant Terrible?," PharmacoEconomics, Springer, vol. 36(1), pages 5-6, January.
    9. Henkel, Joachim & Rønde, Thomas & Wagner, Marcus, 2015. "And the winner is—Acquired. Entrepreneurship as a contest yielding radical innovations," Research Policy, Elsevier, vol. 44(2), pages 295-310.
    10. Shu‐Mei Tsai & Jung‐Ta Kao & Yun‐Fang Tsai, 2019. "Illness trajectory of initial infection for patients with hepatitis C: A qualitative study," Nursing & Health Sciences, John Wiley & Sons, vol. 21(1), pages 112-118, March.
    11. Iacocca, Kathleen & Mahar, Stephen & Daniel Wright, P., 2022. "Strategic horizontal integration for drug cost reduction in the pharmaceutical supply chain," Omega, Elsevier, vol. 108(C).
    12. David Beheshti, 2019. "Adverse health effects of abuse‐deterrent opioids: Evidence from the reformulation of OxyContin," Health Economics, John Wiley & Sons, Ltd., vol. 28(12), pages 1449-1461, December.
    13. Li, Hai & Qing, Qiankai & Wang, Juan & Hong, Xianpei, 2021. "An analysis of technology licensing and parallel importation under different market structures," European Journal of Operational Research, Elsevier, vol. 289(1), pages 132-143.
    14. Roediger, Alexander & Wilsdon, Tim & Haderi, Artes & Pendleton, Kathy & Azais, Boris, 2019. "Competition between on-patent medicines in Europe," Health Policy, Elsevier, vol. 123(7), pages 652-660.
    15. Rahul RK Kapoor & Nicolas van Zeebroeck, 2016. "The laws of action and reaction: on determinants of patent disputes in European chemical and drug industries," Working Papers TIMES² WP 2016-019, ULB -- Universite Libre de Bruxelles.
    16. Magnac, Thierry & Dubois, Pierre, 2023. "Optimal Intertemporal Curative Drug Expenses: The Case of Hepatitis C in France," TSE Working Papers 23-1402, Toulouse School of Economics (TSE).
    17. Wang, Yingjia & Lin, Jiaxin & Choi, Tsan-Ming, 2020. "Gray market and counterfeiting in supply chains: A review of the operations literature and implications to luxury industries," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 133(C).
    18. Ribeiro, Barbara & Shapira, Philip, 2020. "Private and public values of innovation: A patent analysis of synthetic biology," Research Policy, Elsevier, vol. 49(1).
    19. Daniela Moye-Holz & S. Vogler, 2022. "Comparison of Prices and Affordability of Cancer Medicines in 16 Countries in Europe and Latin America," Applied Health Economics and Health Policy, Springer, vol. 20(1), pages 67-77, January.
    20. Salant, Stephen, 2021. "Arbitrage Deterrence: A Theory of International Drug Pricing," RFF Working Paper Series 21-07, Resources for the Future.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jijerp:v:18:y:2021:i:3:p:1119-:d:488068. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.