Patent policy regulation and public health

Abstract

This paper analyzes the impact of the trade-related aspects of intellectual property rights (TRIPS) agreement on social welfare, when the effects on public health are taken into account. In particular, we study how the new international patent policy affects social welfare through the availability of pharmaceutical products. Extending the model developed by Grossman and Lai (Am Econ Rev 94 (5):1635-1653, 2004) on optimal patent protection, this paper examines the externality generated by the intellectual property rights enforcement on our definition of public health. 1 Intellectual property rights include a large range of legal tools apt to protect inventions; literary and artistic works; and symbols, names and images used in commerce (i.e. copyrights, industrial design, patents, trademarks, etc.) In the current work we focus our analysis on the optimal patent policy, and we will use IPR(s) exclusively to refer to patent(s). 2 About the global dimension of non-communicable diseases see Murray and Lopez (1996).

Achieving dynamic efficiency in pharmaceutical innovation: Identifying the optimal share of value and payments required

“…This does not, however, directly address what the level of reward ought to be as it implicitly assumes that the period of IPP is already optimal. Others have considered the global dynamics of pharmaceutical pricing, the implications of price controls and the implications of strengthening IPP, all from a similar perspective (Bennato & Giulietti, 2019; Chu, 2008; Council of Economic Advisers, 2019; Egan & Philipson, 2013; Filson, 2012; Gigi, Emma van, Jennifer, & Jeffrey, 2017; Goldman et al., 2011; Lakdawalla et al., 2008; Santerre & Vernon, 2006). Some have argued that it is evidence of the health opportunity cost associated with health care expenditure, rather than individual willingness to pay, that represents the maximum price that health care systems can afford to pay for the benefits of an innovation during IPP, while acknowledging that this is only dynamically efficient if the period of IPP is already considered optimal (Claxton, 2007; Claxton et al., 2008).…”