Universities and access to medicines: What is the optimal ‘humanitarian license’?

Annamaria Conti () and Patrick Gaulé
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Annamaria Conti: Chaire en Economie et Management de l'Innovation, Collège du Management de la Technologie, Ecole Polytechnique Fédérale de Lausanne

CEMI Working Papers from Ecole Polytechnique Fédérale de Lausanne, Collège du Management de la Technologie, Management of Technology and Entrepreneurship Institute, Chaire en Economie et Management de l'Innovation

Abstract: This paper seeks to add an economic contribution to the current debate on using university licensing contracts to improve access to medicines in developing countries. We build a simple model in which we have a university licensing out an academic invention to a profit-maximizing pharmaceutical company. We compare three different types of licensing contracts that the university might use to enhance access to pharmaceuticals in the South: (1) an exclusive license limited to the North; (2) an exclusive license worldwide with a price cap in the South; and (3) an exclusive license worldwide with a price cap in the South and a clause specifying that the licensee would lose its exclusivity in the South if it does not supply the Southern market. We show that in a simple model with asymmetric information on production costs the latter type of contract dominates the two others.

Keywords: technology licensing; university licensing; access to medicines (search for similar items in EconPapers)
JEL-codes: L3 O32 O34 O38 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2008-02
New Economics Papers: this item is included in nep-hea, nep-ipr and nep-pr~
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