Financing Pharmaceutical Innovation: How Much Should Poor Countries Contribute?

27 Pages Posted: 21 Jul 2008

See all articles by William Jack

William Jack

World Bank

Jean O. Lanjouw

University of California, Berkeley, College of Natural Resources, Department of Agricultural & Resource Economics (Deceased); Yale University, Faculty of Arts & Sciences, Department of Economics (Deceased); Brookings Institution (Deceased)

Date Written: 7/28/2003

Abstract

We use a public economics framework to consider how pharmaceuticals should be priced when at least some of the R&D incentive comes from sales revenues. We employ familiar techniques of public finance to relax some of the restrictions implied in the standard use of Ramsey pricing. In the more general model, poor countries should not necessarily cover even their own marginal costs, and the pricing structure is not related to that which would be chosen by a monopolist in a simple way. We use this framework to examine on-going debates regarding the international patent system as embodied in the WTO's TRIPS agreement.

Keywords: international patent system, pharmaceuticals, developing countries

Suggested Citation

Jack, William G. and Lanjouw, Jean Olson, Financing Pharmaceutical Innovation: How Much Should Poor Countries Contribute? (7/28/2003). Center for Global Development Working Paper No. 28. Available at SSRN: https://ssrn.com/abstract=1111615 or http://dx.doi.org/10.2139/ssrn.1111615

William G. Jack (Contact Author)

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Jean Olson Lanjouw

University of California, Berkeley, College of Natural Resources, Department of Agricultural & Resource Economics (Deceased)

Yale University, Faculty of Arts & Sciences, Department of Economics (Deceased) ( email )

28 Hillhouse Ave
New Haven, CT 06520-8264
United States
203-432-3568 (Phone)
203-432-6323 (Fax)

Brookings Institution (Deceased)

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