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Patents and the global diffusion of new drugs

Cockburn, Iain and Lanjouw, Jean O. and Schankerman, Mark (2014) Patents and the global diffusion of new drugs. CEP Discussion Papers (CEPDP1298). Centre for Economic Performance, London School of Economics and Political Science, London, UK.

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Abstract

This paper studies how patent rights and price regulation affect how fast new drugs are launched in different countries, using newly constructed data on launches of 642 new drugs in 76 countries for the period 1983-2002, and information on the duration and content of patent and price control regimes. Price regulation strongly delays launch, while longer and more extensive patent protection accelerates it. Health policy institutions, and economic and demographic factors that make markets more profitable, also speed up diffusion. The effects are robust to using instruments to control for endogeneity of policy regimes. The results point to an important role for patents and other policy choices in driving the diffusion of new innovations. This project was initiated by Jean (Jenny) Lanjouw. Tragically, Jenny died in late 2005, but had asked us to complete the project. This took much longer than expected because it involved complete reconstruction of the data set and empirical work. It is essentially a new paper in its current form, but it remains an important part of Jenny’s legacy and a topic to which she devoted much of her intellectual and policy efforts. We hope she would be satisfied with our work which, for us, was a labor of love.

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk/_new/publications/series.asp?...
Additional Information: © 2014 The Authors
Divisions: Economics
Centre for Economic Performance
STICERD
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HV Social pathology. Social and public welfare. Criminology
R Medicine > RS Pharmacy and materia medica
T Technology > T Technology (General) > T201 Patents. Trademarks
JEL classification: I - Health, Education, and Welfare > I1 - Health > I18 - Government Policy; Regulation; Public Health
K - Law and Economics > K1 - Basic Areas of Law > K19 - Other
L - Industrial Organization > L6 - Industry Studies: Manufacturing > L65 - Chemicals; Rubber; Drugs; Biotechnology
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O31 - Innovation and Invention: Processes and Incentives
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O33 - Technological Change: Choices and Consequences; Diffusion Processes
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O34 - Intellectual Property Rights: National and International Issues
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O38 - Government Policy
Sets: Departments > Economics
Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Series: Working Papers > CEP Discussion Papers
Date Deposited: 04 Dec 2014 16:54
Last Modified: 04 Dec 2014 16:54
Funders: Economic and Social Research Council
URI: http://eprints.lse.ac.uk/id/eprint/60450

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