DP15544 Licensing Life-Saving Drugs for Developing Countries: Evidence from the Medicines Patent Pool

Author(s): Alberto Galasso, Mark Schankerman
Publication Date: December 2020
Keyword(s): developing countries, HIV, licensing, Patent pool, patents, pharmaceuticals, Public health
JEL(s): I18, O31, O34
Programme Areas: Industrial Organization, Development Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=15544

We study the effects of a patent pool on the licensing and adoption of life-saving drugs in low- and middle-income countries. Using data on licensing and sales for HIV, hepatitis C and tuberculosis drugs, we show that there is an immediate and large increase in licensing by generic firms when a patent is included in the Medicines Patent Pool (MPP). This finding is robust to identification strategies to deal with endogeneity of MPP patents and countries. The impact of the MPP is especially large for small, non-Sub-Saharan countries. The impact on actual entry and sales, however, is much smaller than on licensing, which is due to geographic bundling of licenses by the MPP. More broadly, the paper highlights the potential of pools in promoting technology diffusion of biomedical innovation.