Global Drug Diffusion and Innovation with the Medicines Patent Pool

91 Pages Posted: 2 Aug 2019 Last revised: 11 Aug 2020

See all articles by Lucy Xiaolu Wang

Lucy Xiaolu Wang

Max Planck Institute for Innovation and Competition

Date Written: August 7, 2020

Abstract

I study the impact of the first joint licensing platform for patented drugs, the Medicines Patent Pool, on global drug diffusion and innovation. The pool allows generic firms worldwide to license drug bundles cheaply and conveniently for sales in a set of developing countries. I construct a novel dataset from licensing contracts, public procurement, clinical trials, and drug approvals. Using difference-in-differences methods, I find that the pool leads to substantial increases in the generic supply of drugs purchased. In addition, there are positive responses in R&D inputs and outputs. Finally, I estimate a simple structural model to quantify welfare gains.

Keywords: patent pool, drug bundling, innovation and diffusion

JEL Classification: O3, K2, I1

Suggested Citation

Wang, Lucy Xiaolu, Global Drug Diffusion and Innovation with the Medicines Patent Pool (August 7, 2020). Available at SSRN: https://ssrn.com/abstract=3426554 or http://dx.doi.org/10.2139/ssrn.3426554

Lucy Xiaolu Wang (Contact Author)

Max Planck Institute for Innovation and Competition ( email )

Marstallplatz 1
Munich, Bayern 80539
Germany

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