The Role of TRIPS in Encouraging Diffusion of Pharmaceutical Technology to Developing Countries

20 Pages Posted: 21 Feb 2022

See all articles by Iain M. Cockburn

Iain M. Cockburn

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

Tim Wilsdon

Charles River Associates

Michele Pistollato

Charles River Associates

Rajini Jayasuriya

Charles River Associates (CRA)

Tom Watson

Charles River Associates

Date Written: December 20, 2021

Abstract

One of the explicit goals of the 1995 TRIPS Agreement is promotion of technological innovation and transfer and dissemination of technologies worldwide. We statistically assess the relative impact of TRIPS on technology diffusion in the life sciences sector, using a longitudinal panel dataset that covers a wide range of developing countries for the period 1995 to 2017. We focus our examination of pharmaceutical technology diffusion on three indicators of knowledge production and transfer: scientific publications as an indicator of basic research; pharmaceutical patent applications by domestic inventors; local activity in clinical trials; and knowledge sharing through licensing. Controlling for a variety of potential confounding factors, we find that the pharma-specific provisions in TRIPS have a positive and statistically significant association with these measures of technology diffusion: adoption of TRIPS provisions is associated with a 67% increase in basic research in life sciences; a 30% increase in commercial research; 18% greater participation in drug development; and a 53% increase in knowledge transfer through licensing. These findings suggest significant economic benefits to countries that provide stronger protection of IP for pharmaceuticals, through increased domestic investment in the pharmaceutical sector, and more rapid and extensive technology diffusion.

Keywords: TRIPS, intellectual property rights, technology diffusion, pharmaceuticals

JEL Classification: L65, O31, O33, O34

Suggested Citation

Cockburn, Iain M. and Wilsdon, Tim and Pistollato, Michele and Jayasuriya, Rajini and Watson, Tom, The Role of TRIPS in Encouraging Diffusion of Pharmaceutical Technology to Developing Countries (December 20, 2021). Available at SSRN: https://ssrn.com/abstract=3990215 or http://dx.doi.org/10.2139/ssrn.3990215

Iain M. Cockburn

Boston University Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States
617-353-3775 (Phone)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Tim Wilsdon

Charles River Associates ( email )

1201 F. St. NW
Ste. 700
Washington, DC 20004
United States

Michele Pistollato (Contact Author)

Charles River Associates

8 Finsbury Circus
London, Greater London EC2M 7EA
United Kingdom

Rajini Jayasuriya

Charles River Associates (CRA) ( email )

1201 F. St. NW
Ste. 700
Washington, DC 20004
United States

Tom Watson

Charles River Associates ( email )

8 Finsbury Circus
South Place
London, EC2M 2AQ
United Kingdom
SW8 2LW (Fax)

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