Marjit, Sugata and Kabiraj, Tarun and Dutta, Arijita (2009): Strategic Under-utilization of Patents and Entry Deterrence: The Case of Pharmaceutical Industry.
Download (108kB) | Preview
This paper seeks to explain why some pharmaceutical companies are observed to withdraw their products before patents are expired and simultaneously introduce new patented (competing) products. Given the specific nature of drug markets, the companies in fact increase the entry cost of the potential generic drug manufacturers and thereby lessen competition for new drugs. The paper determines the optimal date of withdrawing the product and studies comparative static effects of the change of parameters underlying the model.
|Item Type:||MPRA Paper|
|Original Title:||Strategic Under-utilization of Patents and Entry Deterrence: The Case of Pharmaceutical Industry|
|English Title:||Strategic Under-utilization of Patents and Entry Deterrence: The Case of Pharmaceutical Industry|
|Keywords:||Patent protection; patent expiry; pharmaceutical industries; generic drugs; entry cost.|
|Subjects:||O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development; Intellectual Property Rights
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance
|Depositing User:||sugata marjit|
|Date Deposited:||11. Dec 2009 09:26|
|Last Modified:||15. Oct 2014 19:35|
Aoki, R. and T. J. Prusa, (1993). “International Standards of Intellectual Property Protection and R&D Incentives”, Journal of International Economics 35, 251-273.
Chin, J.C. and G.M. Grossman, (1991). “Intellectual Property Rights and North-South Trade” in R.W. Jones and A.O. Krueger (eds.), The Political Economy of International Trade: Essays in Honor of R. E. Baldwin (Cambridge: Mass. Basil Blackwell), 90-107.
Conrad, C. A. (1983), “The Advantages of Being First and Competition between Firms”, International Journal of Industrial Organization 1, 353-364.
Deardorff, A. V. (1992), “Welfare Effects of Global Patent Protection”, Economica 59, 35-51.
Diwan, I. and D. Rodrik (1991), “Patents, Appropriate Technology and North South Trade”, Journal of International Economics 30, 27-47.
Dixit, A. (1980), “The Role of Investment in Entry Deterrence”, Economic Journal 90, 95-106.
Dutta, A. (2003), “Economic Reforms and Pharmaceutical Industry in India - A Case Study”, Ph.D. Thesis, Calcutta University.
Frank, R. G. and D. S. Salkever (1992), “Pricing, Patent Loss and the Market for Pharmaceuticals”, Southern Economic Journal 59, 165-179.
Grabowski, H. G. and J. M. Vernon (1992), “Brand Loyalty, Entry, and Price Competition in Pharmaceuticals after the 1984 Drug Act”, Journal of Law and Economics 35, 331-350.
Grossman, G.M and E. Lai (2004), “International Protection of Intellectual Property”, American Economic Review 94,1635-1653.
Helpman, E. (1993), “Innovation, Imitation, and Intellectual Property Rights”, Econometrica 61, 1247-1280.
Hollis, A. (2003), “The Anti-Competitive Effects of Brand-Controlled `pseudo-Generics’ in the Canadian Pharmaceutical Market”, Canadian Public Policy 29, 21-31.
Hollis, A. (2005), “How Do Brands’ `Own Generics’ Affect Pharmaceutical Prices?”, Review of Industrial Organization 27, 329-350.
Kabiraj, T. (2000), “Providing Protection to Foreign-Owned Patents - A Strategic Decision”, Keio Economic Studies 37, 9-24.
Kamien, M. I. and I. Zang (1999), “ Virtual Patent Extension by Cannibalization”, Southern Economic Journal 66, 117-131.
Kong, Y. and J. Selden (2004), “Pseudo-Generic Products and Barriers to Entry in Pharmaceutical Markets”, Review of Industrial Organization 25, 71-86.
Lanjouw, J. O. (1997), “The Introduction of Pharmaceutical Product Patents in India: ‘Heartless Exploitation of the Poor’?”, NBER Working Paper No. 6366.
Marjit, S. and H. Beladi (1998), “Product vs. Process Patents: A Theoretical Approach”, Journal of Policy Modeling 20, 193-199.
Maskus, K.E. (1990), “Normative Concerns in the International Protection of Intellectual Property Rights”, World Economy 13, 387-409.
Milgrom, P. and J. Roberts (1982), “Limit Pricing and Entry under Incomplete Information: An Equilibrium Analysis”, Econometrica 50, 443-459.
Nogues, J. J. (1993), “Social Costs and Benefits of Introducing Patent Protection for Pharmacutical Drugs in Developing Countries”, The Developing Economies 31, 24-53. Salop, S. and D. Schiefman (1983), “Raising Rival’s Costs”, American Economic Review, Papers and Proceedings 73, 267-271.
Scherer, F. M. (2002), “A Note on Global Welfare in Pharmaceutical Patenting”, Working Paper No. 03-11, Federal Reserve Bank of India.
Scherer, F. M. and D. Ross (1990), Industrial Market Structure and Economic Performance: Boston, Houghton Mifflin Co.
Schmalansee, R. (1982), “Product Differentiation Advantages of Pioneering Brands”, American Economic Review 72, 349-365. Slatter S. S. P. (1977), Competitive and Marketing Strategies in the pharmaceutical industry, Croom Helm, London.
Statman, M. (1981), “The Effect of Patent Expiration on the Market Position of Drugs”, in R. B. Helms (Ed.), Drugs and Health: Economic Issues and Policy Objectives, Washington D.C.: American Enterprise Institute.
Taylor, M. S. (1994), “TRIPs, Trade and Growth”, International Economic Review 35, 361-381.
Watal, J. (1996), “Introducing Product Patents in the Indian Pharmacetical Sector --- Implications for Prices and Welfare”, World Competition: Review of Law and Economics 20, 5-21.
Yang, Y. (1998), “Why do Southern Countries Have Little Incentive to Protect Northern Intellectual Property Rights?”, Canadian Journal of Economics 31, 800-816