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Patents, Innovation and Access to New Pharmaceuticals

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  • Grabowski, Henry

Abstract

This paper considers the role of intellectual property rights in the development of and access to new pharmaceuticals. A number of studies have found patents are significantly more important to pharmaceutical firms in appropriating the benefits from innovation compared to other high tech industries. The reason for this is because the costs of drug innovation are very high while the costs of imitation are relatively low. Hence the industry is subject to significant free rider problems. The paper discusses the economics of the innovative process and considers how patent policies have evolved in response to these characteristics in several developed countries with research intensive drug firms. One area currently receiving policy attention is the effect of patents on the development of and access to new medicines in developing countries. The final section of the paper focuses on this issue and discusses the need for an orphan drug type program to stimulate more R&D on diseases specific to third world countries.

Suggested Citation

  • Grabowski, Henry, 2002. "Patents, Innovation and Access to New Pharmaceuticals," Working Papers 02-28, Duke University, Department of Economics.
  • Handle: RePEc:duk:dukeec:02-28
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    Cited by:

    1. 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.
    2. Langinier, Corinne, 2004. "Are patents strategic barriers to entry?," Journal of Economics and Business, Elsevier, vol. 56(5), pages 349-361.
    3. Lorenz, Steffi, 2015. "Diversität und Verbundenheit der unternehmerischen Wissensbasis: Ein neuartiger Messansatz mit Indikatoren aus Innovationsprojekten," Discussion Papers on Strategy and Innovation 15-01, Philipps-University Marburg, Department of Technology and Innovation Management (TIM).
    4. Ants Kukrus & Raul Kartus, 2005. "Patent Protection of Pharmaceutical Products in the Globalising World Economy," Working Papers 136, Tallinn School of Economics and Business Administration, Tallinn University of Technology.
    5. Luiz Andrade & Catherine Sermet & Sylvain Pichetti, 2016. "Entry time effects and follow-on drug competition," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(1), pages 45-60, January.
    6. Alka Chadha & Åke Blomqvist, 2005. "Patent Races, “Me-Too” Drugs, and Generics: A Developing-World Perspective," Departmental Working Papers wp0513, National University of Singapore, Department of Economics.
    7. Neel U. Sukhatme & Judd N. L. Cramer, 2013. "Optimal Patent Term and Cross-Industry Measures of Patent Term Sensitivity," Working Papers 1484, Princeton University, Department of Economics, Industrial Relations Section..
    8. Michel Dumont & Peter Willemé, 2013. "Working Paper 02-13 - Machines that go ‘ping’: medical technology and health expenditures in OECD countries," Working Papers 1302, Federal Planning Bureau, Belgium.

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