Emerging Market Pharmaceutical Supply: A Prescription for Sharing the Benefits of Global Information Flow

Abstract:     
New information technologies enable individuals in disparate locations to conduct cutting-edge research, to move that research into the development and testing of new medicines, to manufacture high-quality products, and to move those products to patients around the world. Conceptually, the world pharmaceuticals supply market may become increasingly competitive at all stages: basic research, product development, manufacturing and distribution. The diffusion of technological competence to major developing country actors in the pharmaceutical sector, such as India and China, as well as to more specialized actors such as Bangladesh (manufacturing) and Singapore (research), could result in a significant expansion of the pool of products available to treat disease, as well as more affordable prices to consumers.

This chapter argues that the emergence of wider competition in the quest for new products, the development of those products, and the improvement of production technologies and distribution to patients/end users are strongly in the welfare interest of the global public. It further argues that emerging market countries are not yet at the stage in which the application of competition law will adequately promote and protect domestic pharmaceutical companies. It recommends that emerging market countries adopt industrial policies designed to promote and protect their infant pharmaceutical supply sectors. It recognizes that the United States, among other OECD countries, significantly subsidizes and otherwise protects its pharmaceutical industry and that emerging market countries cannot realistically compete with the advantages presently held by OECD industries without adopting and implementing their own industrial policy measures.

Number of Pages in PDF File: 16

Keywords: pharmaceutical production, competition, patents, emerging markets

JEL Classification: I18, K32, K33, L11, L65, O31, O34

Accepted Paper Series