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