Financing Pharmaceutical Innovation: When Should Poor Countries Contribute?
Billy Jack & Jenny Lanjouw ()
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Billy Jack & Jenny Lanjouw: Department of Economics, Georgetown University, http://www9.georgetown.edu/faculty/wgj/
Authors registered in the RePEc Author Service: William Jack and
Jean Olson Lanjouw
Working Papers from Georgetown University, Department of Economics
We use a public economics framework to consider how pharmaceuticals should be priced when at least some of the R&D incentive comes from sales revenues. We employ familiar techniques of public finance to adjust standard pricing prescriptions in the context of global diseases, in which distributional inequities are extreme. With these adjustments, poor countries should not necessarily cover even their own marginal costs, and the pricing structure is not related to that which would be chosen by a monopolist in a simple way. We use this framework to examine on-going debates regarding the international patent system as embodied in the WTO's TRIPS agreement.
Keywords: Pharmaceutical pricing; Ramsey pricing; TRIPS (search for similar items in EconPapers)
JEL-codes: D6 H2 I1 O1 (search for similar items in EconPapers)
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Roger Lagunoff Professor of Economics Georgetown University Department of Economics Washington, DC 20057-1036
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