The Market Impacts of Pharmaceutical Product Patents in Developing Countries: Evidence from India

NBER Working Paper No. 20548

Issued in October 2014

NBER Program(s):Development Economics, Health Care, Health Economics, Industrial Organization, Public Economics, Productivity, Innovation, and Entrepreneurship



In 2005, as the result of a World Trade Organization mandate, India began to implement product patents for pharmaceuticals that were compliant with the 1995 Trade-Related Aspects of Intellectual Property Rights (TRIPS). We combine pharmaceutical product sales data for India with a newly gathered dataset of molecule-linked patents issued by the Indian patent office. Exploiting variation in the timing of patent decisions, we estimate that a molecule receiving a patent experienced an average price increase of just 3-6 percent with larger increases for more recently developed molecules and for those produced by just one firm when the patent system began. Our results also show little impact on quantities sold or on the number of pharmaceutical firms operating in the market.

Acknowledgments

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Document Object Identifier (DOI): 10.3386/w20548

Published: Mark Duggan & Craig Garthwaite & Aparajita Goyal, 2016. "The Market Impacts of Pharmaceutical Product Patents in Developing Countries: Evidence from India," American Economic Review, American Economic Association, vol. 106(1), pages 99-135, January. citation courtesy of

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