Patents and the Global Diffusion of New Drugs

Analysis of the timing of launches of 642 new drugs in 76 countries during 1983-2002 shows that patent and price regulation regimes strongly affect how quickly new drugs become commercially available in different countries. Price regulation delays launch, while longer and more extensive patent right...

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Bibliographic Details
Published in:The American economic review 2016-01, Vol.106 (1), p.136-164
Main Authors: Cockburn, Iain M., Lanjouw, Jean O., Schankerman, Mark
Format: Article
Language:English
Subjects:
Agreements
Demographics
Developing countries
Diffusion of Innovation
Drug Approval
Drugs
Drugs, Investigational - economics
Economic conditions
Economic policy
Emerging markets
Free trade
Global Health
Gross Domestic Product
Health care policy
Health Policy
Health technology assessment
Humans
Income
Innovations
Intellectual property
International markets
LDCs
Low income groups
Patent law
Patents as Topic
Pharmaceutical industry
Pharmaceuticals
Price regulations
Product development
Product introduction
Public health
R&D
Regulation
Regulatory approval
Research & development
Studies
Wage & price controls
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Summary:Analysis of the timing of launches of 642 new drugs in 76 countries during 1983-2002 shows that patent and price regulation regimes strongly affect how quickly new drugs become commercially available in different countries. Price regulation delays launch, while longer and more extensive patent rights accelerate it. Health policy institutions and economic and demographic factors that make markets more profitable also speed up diffusion. The estimated effects are generally robust to controlling for endogeneity of policy regimes with country fixed effects and instrumental variables. The results highlight the important role of policy choices in driving the diffusion of new innovations.
ISSN:0002-8282
1944-7981
DOI:10.1257/aer.20141482