| By: |
Izhak, Olena;
Saxell, Tanja;
Takalo, Tuomas |
| Abstract: |
The debate on whether COVID-19 vaccine patents are slowing down the pace of
vaccination and the recovery from the crisis has brought the optimal design of
pharmaceutical patent policy to the fore. In this paper we evaluate patent
policy in the US pharmaceutical industry. We estimate the effect of patent
length and scope on generic entry prior to the expiration of new drug patents
using two quasi-experimental approaches: one based on changes in patent laws
and another on the allocation of patent applications to examiners. We find
that extending effective patent length increases generic entry whereas
broadening protection reduces it. To assess the welfare effects of patent
policy, we match these empirical results with a model of new drug development,
generic entry, and patent length and scope. Optimal policy calls for shorter
but broader pharmaceutical patents. |
| Keywords: |
Patent policy,pharmaceuticals,generic entry,innovation,imitation |
| JEL: |
I18 K20 L13 O34 O31 |
| Date: |
2021 |
| URL: |
https://d.repec.org/n?u=RePEc:zbw:bofrdp:rdp2021_016 |