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Investments in Pharmaceuticals Before and After TRIPS

Author

Listed:
  • Margaret K. Kyle

    (Toulouse School of Economics, IDEI, and CEPR)

  • Anita M. McGahan

    (Rotman School of Management and Munk School of Global Affairs, University of Toronto; Institute for Strategy and Competitiveness, Harvard University)

Abstract

The TRIPS Agreement, which specifies minimum levels of intellectual property protection for countries in the WTO, has increased levels of patent protection around the world. Using variation across countries in the timing of patent laws and the severity of disease, we test the hypothesis that increased patent protection results in greater drug development effort. We find that patent protection in wealthy countries is associated with increases in R&D effort. However, the introduction of patents in developing countries has not been followed by greater R&D investment in the diseases that are most prevalent there. © 2012 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Margaret K. Kyle & Anita M. McGahan, 2012. "Investments in Pharmaceuticals Before and After TRIPS," The Review of Economics and Statistics, MIT Press, vol. 94(4), pages 1157-1172, November.
  • Handle: RePEc:tpr:restat:v:94:y:2012:i:4:p:1157-1172
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    More about this item

    Keywords

    pharmaceuticals; TRIPS Agreement; patent protection;
    All these keywords.

    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics

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