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on Intellectual Property Rights |
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Issue of 2014‒04‒05
three papers chosen by Giovanni Ramello Universita' del Piemonte Orientale Amedeo Avogadro |
| By: | Joseph E. Stiglitz |
| Abstract: | The pace of innovation is related both to the level of investment in innovation and the pool of knowledge from which innovators can draw. Both of these are endogenous: Investments in innovations are affected by the pool of knowledge and the ability of firms to appropriate the returns to their innovative activity, itself affected by the intellectual property rights (IPR) regime. But as each firm engages in research, it both contributes to the pool, and takes out from it. The strength and design of IPR affects the extent to which any innovation adds to or subtracts from the pool of ideas that are available to be commercially exploited, i.e. to the technological opportunities. We construct the simplest possible general model to explore the resulting dynamics, showing that, under plausible conditions, stronger intellectual property rights may lead to a lower pace of innovation, and more generally, that long run effects may be the opposite of the short run effects. |
| JEL: | E61 H41 O3 O31 O32 O33 O34 O38 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20014&r=ipr |
| By: | Aleksandra Boutin |
| Keywords: | technology licensing; patent pools; substitutes and complements; independent licensing; price caps; joint marketing |
| JEL: | K11 K21 L12 L24 L41 M20 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/159222&r=ipr |
| By: | Rena M. Conti; Ernst R. Berndt |
| Abstract: | We examine the impact of loss of U.S. patent exclusivity (LOE) on the prices and utilization of specialty drugs between 2001 and 2007. We limit our empirical cohort to drugs commonly used to treat cancer and base our analyses on nationally representative data from IMS Health. We begin by describing the average number of manufacturers entering specialty drugs following LOE. We observe the number of firms entering the production of newly generic specialty drugs ranges between two and five per molecule in the years following LOE. However, the existence of time-varying and unobservable contract manufacturing practices complicates the definition of "manufacturers" entering the market. We use pooled data methods to examine whether the neoclassical relationship between price declines and volume increases upon LOE holds among these drugs. First, we examine the extent to which estimated prices of these drugs undergoing LOE fall with generic entry. Second, we estimate reduced form random effect models of utilization subsequent to LOE. We observe substantial price erosion after generic entry; average monthly price declines appear to be larger among physician-administered drugs (38-46.4%) compared to oral drugs (25-26%). Additionally, we find average prices for drugs produced by branded firms rise and prices for drugs produced by generic firms fall upon LOE; the latter effect is particularly large among oral drugs. In pooled models, volume appears to increase following generic entry, but this result appears to be largely driven by oral drugs. Molecule characteristics, number of manufacturers and 2007Q4 revenues are significant predictors of post-2007 drug shortages. We discuss second best welfare consequences of these results. |
| JEL: | D04 I11 I18 L11 L65 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20016&r=ipr |