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Patent disclosure and R&D competition in pharmaceuticals

  • Laura Magazzini
  • Fabio Pammolli
  • Massimo Riccaboni
  • Maria Alessandra Rossi

The prominent role played by patents within the pharmaceutical domain is unquestionable. In this paper, we focus on a relatively neglected implication of patents: the effect of patent-induced information disclosure on the dynamics of R&D and market competition. The study builds upon the combination of two large datasets, linking the information about patents to firm-level data on R&D projects and their outcome. Two case studies in the fields of anti-inflammatory compounds and cancer research complement our analysis. We argue that patent disclosure induces R&D competition and shapes firms' technological trajectories. In fact, we show that under conditions of uncertainty, patent disclosure can contribute to generate knowledge spillovers, promoting multiple parallel research efforts on plausible targets and stimulating private investment and competition.

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Article provided by Taylor & Francis Journals in its journal Economics of Innovation and New Technology.

Volume (Year): 18 (2009)
Issue (Month): 5 ()
Pages: 467-486

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Handle: RePEc:taf:ecinnt:v:18:y:2009:i:5:p:467-486
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  1. Laura Magazzini & Fabio Pammolli & Massimo Riccaboni & Maria Alessandra Rossi, 2009. "Patent Disclosure and R&D Competition in Pharmaceuticals," ROCK Working Papers 053, Department of Computer and Management Sciences, University of Trento, Italy, revised 11 Jun 2009.
  2. Rebecca Henderson & Iain Cockburn, . "Scale, Scope and Spillovers: The Determinants of Research Productivity in Drug Discovery," Working Papers ec25/94, Department of Economics, University of Lancaster.
  3. Bessen, James, 2005. "Patents and the diffusion of technical information," Economics Letters, Elsevier, vol. 86(1), pages 121-128, January.
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  8. Jean O. Lanjouw & Mark Schankerman, 1999. "The Quality of Ideas: Measuring Innovation with Multiple Indicators," NBER Working Papers 7345, National Bureau of Economic Research, Inc.
  9. Dietmar Harhoff & Francis Narin & F. M. Scherer & Katrin Vopel, 1999. "Citation Frequency And The Value Of Patented Inventions," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 511-515, August.
  10. Horstmann, Ignatius & MacDonald, Glenn M & Slivinski, Alan, 1985. "Patents as Information Transfer Mechanisms: To Patent or (Maybe) Not to Patent," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 837-58, October.
  11. Orsenigo, L. & Pammolli, F. & Riccaboni, Massimo, 2001. "Technological change and network dynamics: Lessons from the pharmaceutical industry," Research Policy, Elsevier, vol. 30(3), pages 485-508, March.
  12. James J. Anton & Dennis A. Yao, 2003. "Patents, Invalidity, and the Strategic Transmission of Enabling Information," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(2), pages 151-178, 06.
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