The Market Impacts of Pharmaceutical Product Patents in Developing Countries: Evidence from India

56 Pages Posted: 6 Oct 2014 Last revised: 22 Feb 2021

Date Written: October 2014

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

Duggan, Mark and Garthwaite, Craig L. and Goyal, Aparajita, The Market Impacts of Pharmaceutical Product Patents in Developing Countries: Evidence from India (October 2014). NBER Working Paper No. w20548, Available at SSRN: https://ssrn.com/abstract=2505854

Mark Duggan

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States

Craig L. Garthwaite

Northwestern University - Department of Management & Strategy ( email )

Kellogg School of Management
2001 Sheridan Road
Evanston, IL 60208
United States

Aparajita Goyal

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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