Global Drug Diffusion and Innovation with the Medicines Patent Pool

96 Pages Posted: 2 Aug 2019 Last revised: 25 Apr 2021

See all articles by Lucy Xiaolu Wang

Lucy Xiaolu Wang

University of Massachusetts Amherst - Department of Resource Economics; Max Planck Institute for Innovation and Competition

Date Written: April 14, 2021

Abstract

This paper studies 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, R&D inputs and outputs respond positively overall. The estimated benefits to consumers and firms far exceed the operating costs.

Keywords: patent pool, drug bundling, innovation and diffusion

JEL Classification: O3, K2, I1

Suggested Citation

Wang, Lucy Xiaolu and Wang, Lucy Xiaolu, Global Drug Diffusion and Innovation with the Medicines Patent Pool (April 14, 2021). Available at SSRN: https://ssrn.com/abstract=3426554 or http://dx.doi.org/10.2139/ssrn.3426554

Lucy Xiaolu Wang (Contact Author)

University of Massachusetts Amherst - Department of Resource Economics ( email )

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HOME PAGE: http://www.lucyxiaoluwang.com/

Max Planck Institute for Innovation and Competition ( email )

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