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Financing Pharmaceutical Innovation: When Should Poor Countries Contribute?

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 adjust standard pricing prescriptions in the context of global diseases, in which distributional inequities are extreme. With these adjustments, 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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Paper provided by Georgetown University, Department of Economics in its series Working Papers with number gueconwpa~03-03-15.

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Date of creation: 01 Jan 2003
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Handle: RePEc:geo:guwopa:gueconwpa~03-03-15
Contact details of provider: Postal: Georgetown University Department of Economics Washington, DC 20057-1036
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Web page: http://econ.georgetown.edu/Email:

Order Information: Postal: Roger Lagunoff Professor of Economics Georgetown University Department of Economics Washington, DC 20057-1036
Web: http://econ.georgetown.edu/ Email:


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