"Patents, Price Controls and Access to New Drugs: How Policy Affects Global Market Entry"

Jean Lanjouw, University of California at Berkeley

This study considers how patent rights and price regulation affect whether new drugs are marketed in a country, and how quickly. The analysis covers a large sample of 68 countries at all income levels and includes all drug launches over the period 1982-2002. It uses newly compiled information on legal and regulatory policy, and is the first systematic analysis of the determinants of drug launch in poor countries. According to the study, price control tends to discourage rapid product entry, while the results for patents are mixed. There is evidence that local capacity to innovate matters and that international pricing externalities may play a role.

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