Investments in Pharmaceuticals Before and After TRIPS
This paper addresses the relationship between patent protection and investment in the development of new pharmaceutical treatments. The TRIPS Agreement, which specifies minimum levels of intellectual property protection for countries in the World Trade Organization, has increased levels of patent protection around the world. Since patents also have the potential to reduce access to treatments through higher prices, it is imperative to assess whether wider use of patents has led to off-setting benefits, such as research on diseases that particularly affect the poor. 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 high income countries is associated with increases in research and development (R&D) effort; in other words, patent protection works in high-income countries to induce R&D. 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. Our results suggest that alternative mechanisms for inducing R&D may be more appropriate than patents for the "neglected" diseases that are concentrated in low-income countries.
|Date of creation:||May 2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jean O. Lanjouw, 2003. "Intellectual Property and the Availability of Pharmaceuticals in Poor Countries," NBER Chapters, in: Innovation Policy and the Economy, Volume 3, pages 91-130 National Bureau of Economic Research, Inc.
- Henry Grabowski, 2002. "Patents, Innovation and Access to New Pharmaceuticals," Journal of International Economic Law, Oxford University Press, vol. 5(4), pages 849-860, December.
- Michael Kremer, 2002. "Pharmaceuticals and the Developing World," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 67-90, Fall.
- Merges, Robert P. & Nelson, Richard R., 1994. "On limiting or encouraging rivalry in technical progress: The effect of patent scope decisions," Journal of Economic Behavior & Organization, Elsevier, vol. 25(1), pages 1-24, September.
- Ward, Michael R & Dranove, David, 1995. "The Vertical Chain of Research and Development in the Pharmaceutical Industry," Economic Inquiry, Western Economic Association International, vol. 33(1), pages 70-87, January.
- DiMasi, Joseph A. & Hansen, Ronald W. & Grabowski, Henry G., 2005. "Setting the record straight on setting the record straight: Response to the Light and Warburton rejoinder," Journal of Health Economics, Elsevier, vol. 24(5), pages 1049-1053, September.
- Lanjouw, Jean O. & Cockburn, Iain M., 2001. "New Pills for Poor People? Empirical Evidence after GATT," World Development, Elsevier, vol. 29(2), pages 265-289, February.
- Frank R. Lichtenberg & Joel Waldfogel, 2003. "Does Misery Love Company? Evidence from pharmaceutical markets before and after the Orphan Drug Act," NBER Working Papers 9750, National Bureau of Economic Research, Inc.
- Wesley M Cohen & Richard R Nelson & John P Walsh, 2003.
"Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (Or Not),"
Levine's Working Paper Archive
618897000000000624, David K. Levine.
- Wesley M. Cohen & Richard R. Nelson & John P. Walsh, 2000. "Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not)," NBER Working Papers 7552, National Bureau of Economic Research, Inc.
- Daron Acemoglu & Joshua Linn, 2004.
"Market Size in Innovation: Theory and Evidence from the Pharmaceutical Industry,"
The Quarterly Journal of Economics,
MIT Press, vol. 119(3), pages 1049-1090, August.
- Daron Acemoglu & Joshua Linn, 2004. "Market Size in Innovation: Theory and Evidence from the Pharmaceutical Industry," Levine's Working Paper Archive 228400000000000002, David K. Levine.
- Daron Acemoglu & Joshua Linn, 2003. "Market Size in Innovation: Theory and Evidence From the Pharmaceutical Industry," NBER Working Papers 10038, National Bureau of Economic Research, Inc.
- Ashish Arora & Andrea Fosfuri & Alfonso Gambardella, 2004. "Markets for Technology: The Economics of Innovation and Corporate Strategy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262511819, June.
- Ginarte, Juan C. & Park, Walter G., 1997. "Determinants of patent rights: A cross-national study," Research Policy, Elsevier, vol. 26(3), pages 283-301, October.
- Grabowski, Henry, 2002. "Patents, Innovation and Access to New Pharmaceuticals," Working Papers 02-28, Duke University, Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:8371. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.