IDEAS home Printed from https://ideas.repec.org/p/sip/dpaper/14-005.html
   My bibliography  Save this paper

The Market Impacts Of Pharmaceutical Product Patents In Developing Countries: Evidence From India

Author

Listed:
  • Mark Duggan

    () (Stanford University)

  • Craig Garthwaite

    () (Northwestern University)

  • Aparajita Goyal

    () (World Bank)

Abstract

In 2005, as the result of a World Trade Organization mandate, India began to implement product patents for pharmaceuticals that were compliant with the 1995 Trade-Related Aspects of Intellectual Property Rights (TRIPS). We combine pharmaceutical product sales data for India with a newly gathered dataset of molecule-linked patents issued by the Indian patent office. Exploiting variation in the timing of patent decisions, we estimate that a molecule receiving a patent experienced an average price increase of just 3-6 percent with larger increases for more recently developed molecules and for those produced by just one firm when the patent system began. Our results also show little impact on quantities sold or on the number of pharmaceutical firms operating in the market.

Suggested Citation

  • Mark Duggan & Craig Garthwaite & Aparajita Goyal, 2014. "The Market Impacts Of Pharmaceutical Product Patents In Developing Countries: Evidence From India," Discussion Papers 14-005, Stanford Institute for Economic Policy Research.
    • Handle: RePEc:sip:dpaper:14-005
    as

    Download full text from publisher

    File URL: http://www-siepr.stanford.edu/repec/sip/14-005.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Milgrom, Paul & Roberts, John, 1982. "Limit Pricing and Entry under Incomplete Information: An Equilibrium Analysis," Econometrica, Econometric Society, vol. 50(2), pages 443-459, March.
    2. Margaret Kyle & Yi Qian, 2014. "Intellectual Property Rights and Access to Innovation: Evidence from TRIPS," NBER Working Papers 20799, National Bureau of Economic Research, Inc.
    3. Daron Acemoglu & Joshua Linn, 2004. "Market Size in Innovation: Theory and Evidence from the Pharmaceutical Industry," The Quarterly Journal of Economics, Oxford University Press, vol. 119(3), pages 1049-1090.
    4. Joan-Ramon Borrell, 2005. "Patents and the faster introduction of new drugs in developing countries," Applied Economics Letters, Taylor & Francis Journals, vol. 12(6), pages 379-382.
    5. Amy Finkelstein, 2004. "Static and Dynamic Effects of Health Policy: Evidence from the Vaccine Industry," The Quarterly Journal of Economics, Oxford University Press, vol. 119(2), pages 527-564.
    6. Raymond Fisman & Shang-Jin Wei, 2004. "Tax Rates and Tax Evasion: Evidence from "Missing Imports" in China," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 471-500, April.
    7. 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.
    8. Nancy T. Gallini, 2002. "The Economics of Patents: Lessons from Recent U.S. Patent Reform," Journal of Economic Perspectives, American Economic Association, vol. 16(2), pages 131-154, Spring.
    9. Petra Moser, 2005. "How Do Patent Laws Influence Innovation? Evidence from Nineteenth-Century World's Fairs," American Economic Review, American Economic Association, vol. 95(4), pages 1214-1236, September.
    10. Panle Gia & Pinelopi K. Goldberg & Shubham Chaudhuri, 2006. "Estimating the Effects of Global Patent Protection in Pharmaceuticals: A Case Study of Quinolones in India," American Economic Review, American Economic Association, vol. 96(5), pages 1477-1514, December.
    11. Amihai Glazer & Henry McMillan, 1992. "Pricing by the Firm Under Regulatory Threat," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 1089-1099.
    12. repec:rje:randje:v:37:y:2006:2:p:324-340 is not listed on IDEAS
    13. Pinelopi Koujianou Goldberg, 2010. "Alfred Marshall Lecture Intellectual Property Rights Protection in Developing Countries: The Case of Pharmaceuticals," Journal of the European Economic Association, MIT Press, vol. 8(2-3), pages 326-353, 04-05.
    14. Sara Fisher Ellison & Catherine Wolfram, 2006. "Coordinating on lower prices: pharmaceutical pricing under political pressure," RAND Journal of Economics, RAND Corporation, vol. 37(2), pages 324-340, June.
    15. Michael Kremer & Heidi Williams, 2010. "Incentivizing Innovation: Adding to the Tool Kit," NBER Chapters,in: Innovation Policy and the Economy, Volume 10, pages 1-17 National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Iain M. Cockburn & Jean O. Lanjouw & Mark Schankerman, 2016. "Patents and the Global Diffusion of New Drugs," American Economic Review, American Economic Association, vol. 106(1), pages 136-164, January.
    2. repec:eee:ecmode:v:70:y:2018:i:c:p:67-77 is not listed on IDEAS
    3. Heidi L. Williams, 2016. "Intellectual Property Rights and Innovation: Evidence from Health Care Markets," Innovation Policy and the Economy, University of Chicago Press, vol. 16(1), pages 53-87.
    4. Bhaven N. Sampat & Kenneth C. Shadlen, 2017. "Secondary Pharmaceutical Patenting: A Global Perspective," NBER Working Papers 23114, National Bureau of Economic Research, Inc.
    5. Baten, Joerg & Bianchi, Nicola & Moser, Petra, 2017. "Compulsory licensing and innovation – Historical evidence from German patents after WWI," Journal of Development Economics, Elsevier, vol. 126(C), pages 231-242.
    6. Carsten Fink & Bronwyn H. Hall & Christian Helmers, 2018. "Intellectual Property Use in Middle Income Countries: The Case of Chile," NBER Working Papers 24348, National Bureau of Economic Research, Inc.
    7. Margaret Kyle & Yi Qian, 2014. "Intellectual Property Rights and Access to Innovation: Evidence from TRIPS," NBER Working Papers 20799, National Bureau of Economic Research, Inc.
    8. Kamal Saggi, 2016. "Trade, Intellectual Property Rights, and the World Trade Organization," Vanderbilt University Department of Economics Working Papers 16-00014, Vanderbilt University Department of Economics.
    9. OKADA, Yoshimi & NAGAOKA, Sadao, 2016. "Global spread of pharmaceutical patent protections: micro evidence from the international equivalents of the drug patents in Japan," IIR Working Paper 16-07, Institute of Innovation Research, Hitotsubashi University.
    10. Simon Freyaldenhoven & Christian Hansen & Jesse M. Shapiro, 2018. "Pre-event Trends in the Panel Event-study Design," NBER Working Papers 24565, National Bureau of Economic Research, Inc.
    11. Keith E. Maskus & William Ridley, 2016. "Intellectual Property-Related Preferential Trade Agreements and the Composition of Trade," RSCAS Working Papers 2016/35, European University Institute.
    12. repec:eee:pubeco:v:156:y:2017:i:c:p:185-199 is not listed on IDEAS

    More about this item

    JEL classification:

    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sip:dpaper:14-005. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anne Shor). General contact details of provider: http://edirc.repec.org/data/cestaus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.