Working Paper: NBER ID: w28545
Authors: Alberto Galasso; Mark Schankerman
Abstract: We study the effects of an institution that pools patents across geographical markets on the licensing and adoption of life-saving drugs in low- and middle-income countries. Using data on licensing and sales for HIV, hepatitis C and tuberculosis drugs, we show that there is an immediate and large increase in licensing by generic firms when a patent is included in the Medicines Patent Pool (MPP). The effect is heterogeneous across countries. The findings are robust to identification strategies to deal with endogeneity of MPP patents and countries. The impact on actual entry and sales, however, is much smaller than on licensing, which is due to geographic bundling of licenses by the MPP. More broadly, the paper highlights the potential of pools in promoting technology diffusion in developing countries.
Keywords: Medicines Patent Pool; licensing; lifesaving drugs; developing countries; health policy
JEL Codes: I18; O31; O34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Geographic bundling of licenses (D45) | Reduced overall licensing opportunities compared to bilateral arrangements (D45) |
| Inclusion in the MPP (D70) | Impact on actual market entry and sales (F61) |
| Bundled nature of licenses (D45) | Limit on countries in which drugs are launched (L65) |
| Inclusion in the MPP (D70) | Increased entry rates and lower prices (D49) |
| Inclusion in the MPP (D70) | Decrease in patentee activity post-inclusion (O34) |
| Probability of observing a licensing deal (D45) | Increase in actual likelihood of a licensee launch (D45) |
| Inclusion in the MPP (D70) | Increase in the probability of licensing for generic firms in low and middle-income countries (D45) |