Patents and the Global Diffusion of New Drugs

48 Pages Posted: 15 Sep 2014 Last revised: 10 Mar 2015

See all articles by Iain M. Cockburn

Iain M. Cockburn

Boston University Questrom School of Business; National Bureau of Economic Research (NBER)

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)

Mark A. Schankerman

London School of Economics and Political Science; Centre for Economic Policy Research (CEPR)

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Date Written: September 2014

Abstract

This paper studies how patent rights and price regulation affect how fast new drugs are launched in different countries, using newly constructed data on launches of 642 new drugs in 76 countries for the period 1983-2002, and information on the duration and content of patent and price control regimes. Price regulation strongly delays launch, while longer and more extensive patent protection accelerates it. Health policy institutions, and economic and demographic factors that make markets more profitable, also speed up diffusion. The effects are robust to using instruments to control for endogeneity of policy regimes. The results point to an important role for patents and other policy choices in driving the diffusion of new innovations.

Suggested Citation

Cockburn, Iain M. and Lanjouw, Jean Olson and Schankerman, Mark A., Patents and the Global Diffusion of New Drugs (September 2014). NBER Working Paper No. w20492, Available at SSRN: https://ssrn.com/abstract=2496248

Iain M. Cockburn (Contact Author)

Boston University Questrom School of Business ( email )

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Boston, MA MA 02215
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617-353-3775 (Phone)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
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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)

Mark A. Schankerman

London School of Economics and Political Science ( email )

Houghton Street
London WC2A 2AE
United Kingdom
+44 20 7955 7518 (Phone)
+44 20 7831 1840 (Fax)

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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