The Market Impacts of Pharmaceutical Product Patents in Developing Countries: Evidence from India

Duggan, Mark; Garthwaite, Craig; Goyal, Aparajita

doi:10.1257/aer.20141301

Cited by 89 publications

(60 citation statements)

References 28 publications

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“…Our use of timing differences across firms is in the spirit of a recent literature exploiting event timing differences in other contexts, e.g. see Duggan et al (2016); Fadlon and Nielsen (2017);Miller (2017); Lafortune et al (2018). In the context of automation, our identification relies in part on the nature of major automation events.…”

Section: An Event Study Differences-in-differences Designmentioning

confidence: 99%

Automatic Reaction - What Happens to Workers at Firms that Automate?

Bessen¹,

Salomons

Berge

2019

SSRN Journal

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We provide the first estimate of the impacts of automation on individual workers by combining Dutch micro-data with a direct measure of automation expenditures covering firms in all private non-financial industries over 2000-2016. Using an event study differences-indifferences design, we find that automation at the firm increases the probability of workers separating from their employers and decreases days worked, leading to a 5-year cumulative wage income loss of about 8% of one year's earnings for incumbent workers. We find little change in wage rates. Further, lost wage earnings are only partially offset by various benefits systems and are disproportionately borne by older workers and workers with longer firm tenure. Compared to findings from a literature on mass layoffs, the effects of automation are more gradual and automation displaces far fewer workers, both at the individual firms and in the workforce overall.A broader empirical literature indeed makes clear that large-scale automation need not bring about labor displacement in aggregate, but rather, leads to labor reallocation. For one, even within the affected industry, automation can increase employment if industry demand is sufficiently elastic (Acemoglu and Restrepo (2018a,d); Bessen (2018)). Moreover, there is evidence that productivity gains generate employment increases in other industries through input-output linkages as well as final demand effects, offsetting any employment losses in automating industries (Autor and Salomons (2018); Gregory et al. (2018)). It should be noted that our analyses do not consider these countervailing forces: this implies our findings do not inform on the macroeconomic impacts of automation. However, to understand how automation affects work, it is critical to also study its effects on individual workers. After all, the absence of displacement in aggregate need not imply the absence of losses for individual workers directly affected by automation. These micro-level impacts are also of first-order importance for policymakers aiming to assuage adverse impacts out of distributional concerns. This paper is structured as follows. We first introduce our data source, Dutch matched employer-employee data which we link to a firm survey containing a direct measure of automation expenditures. Section 3 contains our empirical approach, outlining a definition of automation events and the resulting estimation framework using a combination of event study and differences-in-differences. Our results are divided into total impacts on workers' wage income (section 4), which we decompose into firm separation and employment impacts (section 5), and daily wage impacts conditional on employment (section 6). We next consider to what extent wage income losses are compensated by various benefit schemes (section 7), and how these losses differ across worker types (section 8). Lastly, in section 9 we consider the worker costs of automation conditional on displacement and compare these to income losses arising from mass lay-offs and firm closur...

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Section: An Event Study Differences-in-differences Designmentioning

confidence: 99%

Automatic Reaction - What Happens to Workers at Firms that Automate?

Bessen¹,

Salomons

Berge

2019

SSRN Journal

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“…To name but a few examples, researchers have investigated what role patents play in encouraging the international diffusion of new pharmaceutical drugs (Cockburn, Lanjouw and Schankerman, 2016; Duggan, Garthwaite and Goyal, 2016; Kyle and Qian, 2014), the role of patents in enabling technology licensing (Gans, Hsu and Stern, 2008), how to set royalties for standard-essential patents (Lemley and Shapiro, 2013), and whether the establishment of the US Court of Appeals of the Federal Circuit caused growth in patenting (Kortum and Lerner, 1999). The well-known paper by Hall, Jaffe and Trajtenberg (2001) documenting a linkage between the Compustat data and granted US patents has almost 3,000 citations (Google Scholar, August 6 2016), one summary indicator of the volume of patent-related research using that data set alone.…”

Section: Introductionmentioning

confidence: 99%

How Do Patents Affect Research Investments?

Williams

2017

Annu. Rev. Econ.

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While patent systems have been widely used both historically and internationally, there is nonetheless a tremendous amount of controversy over whether patent systems-in practiceimprove the alignment between private returns and social contributions. In this paper, I describe three parameters-how the disclosure function affects research investments, how patent strength affects research investments in new technologies, and how patents on existing technologies affect follow-on innovation-needed to inform the question of how patents affect research investments, and review the available evidence which has attempted to empirically estimate these parameters.

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“…Second, we study whether drugs were more likely to exit the market once bioequivalence requirements were imposed. For this analysis, and for the remainder of the paper, we follow Duggan et al (2016) and treat each molecule as a separate market, as there is generally little to no substitution across molecules for the treatment of health conditions.…”

Section: Effects Of Quality Regulation On Quality Certification Entrmentioning

confidence: 99%

Quality Regulation and Competition: Evidence from Pharmaceutical Markets

2018

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We study the equilibrium effects of quality regulation on market outcomes by exploiting the staggered phase-in of bioequivalence requirements for generic drugs in Chile. While the objective of the regulation was to increase the perceived quality of generics to reduce vertical differentiation and enhance price competition, we find mostly adverse effects. Even if a large number of drugs obtained the quality certification mandated by the regulation, we estimate that the number of drugs in the market decreased by 13% as a result of the policy. Moreover, we find that prices increased on average by 13% as well as no significant effects on the market share of generics. These adverse effects were mostly concentrated in molecules with small market size. Put together, our results suggest that the intended effects of the regulation on competition through increased (perceived) quality of generics were overturned by adverse competitive effects arising from the costs of complying with the regulation. Small sections of text, that are less than two paragraphs, may be quoted without explicit permission as long as this document is stated. Findings, interpretations and conclusions expressed in this publication are the sole responsibility of its author(s), and it cannot be, in any way, attributed to CAF, its Executive Directors or the countries they represent. CAF does not guarantee the accuracy of the data included in this publication and is not, in any way, responsible for any consequences resulting from its use.

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The Market Impacts of Pharmaceutical Product Patents in Developing Countries: Evidence from India

Cited by 89 publications

References 28 publications

Automatic Reaction - What Happens to Workers at Firms that Automate?

Automatic Reaction - What Happens to Workers at Firms that Automate?

How Do Patents Affect Research Investments?

Quality Regulation and Competition: Evidence from Pharmaceutical Markets

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