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Intellectual Property, Information Technology, Biomedical Research, and Marketing of Patented Products

In: Handbook of Health Economics


  • Goldman, Dana
  • Lakdawalla, Darius


Intellectual property rights are viewed as essential to medical innovation, but very often involve social costs due to patent monopolies and other inefficiencies. We review the positive theory of innovation in health care, as it relates to the determination of innovation demand and supply. The positive theory is related to a host of competing normative models of intellectual property, including patent races, cumulative or sequential innovation, and the implications of health insurance. We also discuss how intellectual property can be used to solve a variety of production externalities that afflict health care, including network externalities, underprovision of marketing, and inefficient provision of diagnostic information. Finally, we discuss novel approaches to protecting intellectual property, including rewards, innovation subsidies, and publicly provided health insurance.

Suggested Citation

  • Goldman, Dana & Lakdawalla, Darius, 2011. "Intellectual Property, Information Technology, Biomedical Research, and Marketing of Patented Products," Handbook of Health Economics, in: Mark V. Pauly & Thomas G. Mcguire & Pedro P. Barros (ed.), Handbook of Health Economics, volume 2, chapter 0, pages 825-872, Elsevier.
  • Handle: RePEc:eee:heachp:2-825
    DOI: 10.1016/B978-0-444-53592-4.00013-X

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    Cited by:

    1. Stern, Ariel Dora, 2017. "Innovation under regulatory uncertainty: Evidence from medical technology," Journal of Public Economics, Elsevier, vol. 145(C), pages 181-200.

    More about this item


    innovation; patents; pharmaceuticals; medical devices;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health


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