Thursday, February 22, 2007

Pharmaceutical patents bad for developing countries

David Levine says :

"The American Economic Review has published a careful study by Chaudhuri, Goldberg and Jia which is a case study of a particular pharmaceutical product in India, Quinolones (a key molecular ingredient of several antibiotics). They estimate...the loss to India is estimated to be 7-9 times the gain to the (rich) Western exporters. The reason for this is quite striking: CGJ consider in addition to the effect of increased price, patents will cause the products to become less available and accessible. It turns out that lack of availability induced by patents has very significant costs.

Whatever ones overall view of the patent system, it is hard to defend the portion of the system that taxes a poor country $7-9 so that a rich country may earn an additional $1.

The American Economic Review version of the paper is not available online, but there is a working paper version available here."

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