Patent Races, “Me-Too” Drugs, and Generics: A Developing-World Perspective

Alka Chadha () and Ake Blomqvist
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Alka Chadha: Department of Economics, National University of Singapore

Departmental Working Papers from National University of Singapore, Department of Economics

Abstract: We build a model of pharmaceutical markets in the light of a patent race among competing firms. The incentive for R&D is the patent on either the breakthrough or the me-too drug. A feature of our model that has not been analyzed before is the prevalence of insurance in developed countries as opposed to developing countries, such that the true burden of financing R&D falls to a greater extent on the former than the latter. We suggest that generics drugs be allowed in low-income countries, particularly since most of them do not have a well-established and functioning pharmaceutical industry.

New Economics Papers: this item is included in nep-hea and nep-ino
Date: 2005
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