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Optimal Intellectual Property Rights Exhaustion and Humanitarian Assistance during a National Health Emergency

Author

Listed:
  • Drusilla K. Brown
  • George Norman

Abstract

We analyze policy options during an international health emergency to provide consumers in least developed countries access to patented life-extending pharmaceuticals. We show that a properly specified tariff against re?xports achieves optimal price dispersion and is shown to depend on the nature of demand, product development costs and humanitarian concerns by western citizens for patients inside a health emergency zone. A tariff dominates regional exhaustion for achieving optimal price dispersion, improves the efficiency properties of a patent for covering product development cost and is a more efficient tool for internalizing a humanitarian externality than a targeted consumption subsidy.

Suggested Citation

  • Drusilla K. Brown & George Norman, 2003. "Optimal Intellectual Property Rights Exhaustion and Humanitarian Assistance during a National Health Emergency," Discussion Papers Series, Department of Economics, Tufts University 0314, Department of Economics, Tufts University.
  • Handle: RePEc:tuf:tuftec:0314
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    File URL: http://ase.tufts.edu/econ/papers/200314.pdf
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    References listed on IDEAS

    as
    1. Deardorff, Alan V, 1992. "Welfare Effects of Global Patent Protection," Economica, London School of Economics and Political Science, vol. 59(233), pages 35-51, February.
    2. Richardson, Martin, 2002. "An elementary proposition concerning parallel imports," Journal of International Economics, Elsevier, vol. 56(1), pages 233-245, January.
    3. Varian, Hal R., 1989. "Price discrimination," Handbook of Industrial Organization,in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 10, pages 597-654 Elsevier.
    4. Patricia Danzon, 1997. "Price Discrimination for Pharmaceuticals: Welfare Effects in the US and the EU," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 4(3), pages 301-322.
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    Cited by:

    1. Olena Ivus & Edwin L.-C. Lai & Ted Sichelman, 2017. "An Economic Model of Patent Exhaustion," CESifo Working Paper Series 6638, CESifo Group Munich.

    More about this item

    Keywords

    Intellectual Property Rights; AIDS; Developing Countries; WTO;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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