Purchase - $5.00 NBER Subscribers Download

Intellectual Property Rights and Access to Innovation: Evidence from Trips

54 Pages Posted: 29 Dec 2014  

Margaret Kyle

University of Toulouse 1 - Toulouse School of Economics (TSE)

Yi Qian

Northwestern University - Kellogg School of Management

Date Written: December 2014

Abstract

We examine the effect of pharmaceutical patent protection on the speed of drug launch, price, and quantity in 60 countries from 2000-2013. The World Trade Organization required its member countries to implement a minimum level of patent protection within a specified time period as part of the TRIPS Agreement. However, members retained the right to impose price controls and to issue compulsory licenses under certain conditions. These countervailing policies were intended to reduce the potential static losses that result from reduced competition during the patent term. We take advantage of the fact that at the product level, selection into TRIPS "treatment" is exogenously determined by compliance deadlines that vary across countries. We find that patents have important consequences for access to new drugs: in the absence of a patent, launch is unlikely. That is, even when no patent barrier exists, generic entry may not occur. Conditional on launch, patented drugs have higher prices but higher sales as well. The price premium associated with patents is smaller in poorer countries. Price discrimination across countries has increased for drugs patented post-TRIPS and prices are negatively related to the burden of disease, suggesting that countervailing policies to offset expected price increases may have had the intended effects.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Suggested Citation

Kyle, Margaret and Qian, Yi, Intellectual Property Rights and Access to Innovation: Evidence from Trips (December 2014). NBER Working Paper No. w20799. Available at SSRN: https://ssrn.com/abstract=2543650

Margaret Kyle (Contact Author)

University of Toulouse 1 - Toulouse School of Economics (TSE) ( email )

Place Anatole-France
Toulouse Cedex, F-31042
France

Yi Qian

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Paper statistics

Downloads
17
Abstract Views
641