Document Detail


An economic justification for open access to essential medicine patents in developing countries.
MedLine Citation:
PMID:  19493066     Owner:  NLM     Status:  In-Process    
Abstract/OtherAbstract:
This paper offers an economic rationale for compulsory licensing of needed medicines in developing countries. The patent system is based on a trade-off between the "deadweight losses" caused by market power and the incentive to innovate created by increased profits from monopoly pricing during the period of the patent. However, markets for essential medicines under patent in developing countries with high income inequality are characterized by highly convex demand curves, producing large deadweight losses relative to potential profits when monopoly firms exercise profit-maximizing pricing strategies. As a result, these markets are systematically ill-suited to exclusive marketing rights, a problem which can be corrected through compulsory licensing. Open licenses that permit any qualified firm to supply the market on the same terms, such as may be available under licenses of right or essential facility legal standards, can be used to mitigate the negative effects of government-granted patents, thereby increasing overall social welfare.
Authors:
Sean Flynn; Aidan Hollis; Mike Palmedo
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Publication Detail:
Type:  Journal Article    
Journal Detail:
Title:  The Journal of law, medicine & ethics : a journal of the American Society of Law, Medicine & Ethics     Volume:  37     ISSN:  1748-720X     ISO Abbreviation:  J Law Med Ethics     Publication Date:  2009  
Date Detail:
Created Date:  2009-06-04     Completed Date:  -     Revised Date:  -    
Medline Journal Info:
Nlm Unique ID:  9315583     Medline TA:  J Law Med Ethics     Country:  United States    
Other Details:
Languages:  eng     Pagination:  184-208     Citation Subset:  T    
Affiliation:
Program on Information Justice and Intellectual Property.
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