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Financing Pharmaceutical Innovation: How Much Should Poor Countries Contribute?

  • William Jack

    ()

  • Jean O. Lanjouw

We use a public economics framework to consider how pharmaceuticals should be priced when at least some of the R&D incentive comes from sales revenues. We employ familiar techniques of public finance to relax some of the restrictions implied in the standard use of Ramsey pricing. In the more general model, poor countries should not necessarily cover even their own marginal costs, and the pricing structure is not related to that which would be chosen by a monopolist in a simple way. We use this framework to examine on-going debates regarding the international patent system as embodied in the WTO’s TRIPS agreement.

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File URL: http://www.cgdev.org/content/publications/detail/2762
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Paper provided by Center for Global Development in its series Working Papers with number 28.

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Length: 27 pages
Date of creation: Jul 2003
Date of revision:
Handle: RePEc:cgd:wpaper:28
Contact details of provider: Web page: http://www.cgdev.org

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