Working Paper: NBER ID: w11321
Authors: Jean O. Lanjouw
Abstract: Efforts to strengthen the global patent system for pharmaceuticals continue to be controversial, and what will likely be a similarly fraught international debate over price controls has begun. The outcome of international negotiations and the resulting policy decisions made by each country will have many ramifications - influencing the size of future investment in medical research, the availability of the resulting therapies, how the financial burdens are distributed across countries, and finally the health of consumers. This paper considers how legal and regulatory policies affect whether new drugs are marketed in a country, and how quickly. Less than one-half of the new pharmaceutical molecules that are marketed worldwide are sold in any given country, and those that are sold are often available to consumers in one country only six or seven years after those in another. Both price regulation and intellectual property rights influence these outcomes. The analysis covers a large sample of 68 countries at all income levels and includes all drug launches over the period 1982-2002. It uses newly compiled information on legal and regulatory policy, and is the first systematic analysis of the determinants of drug launch in poor countries.
Keywords: No keywords provided
JEL Codes: L1; I1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Stronger intellectual property rights (O34) | Increased likelihood of drug launches (L65) |
| Stronger intellectual property rights (O34) | More attractive local markets for multinational firms (F23) |
| Stronger intellectual property rights (O34) | Delayed market entry in lower-priced countries (D49) |
| Price controls (E64) | Reduced product entry in lower-priced countries (F61) |
| Stronger intellectual property rights + Price controls (O34) | Complex relationship affecting drug launch dynamics (L14) |
| Patents (O34) | Incentivize firms to launch drugs (O31) |
| Patents (O34) | Control that can lead to delays in market entry (D45) |