UC Davis Agricultural and Resource Economics

Christian Helmers, Universidad Carlos III de Madrid

The Impact of Foreign Pharmaceutical Patents on Innovation in Chile

Date and Location

Monday, April 8, 2013, 4:10 PM - 5:30 PM
ARE Conference Room, 2102 Social Sciences and Humanities

Abstract

Foreign multinational companies account for around 95% of pharmaceutical patents filed in Chile between 1991 and 2010. These patents account for over half of all patents filed in Chile during the past two decades. This study analyzes the impact of foreign pharmaceutical patenting behavior on the domestic pharmaceutical industry in Chile. We analyze the patent filing strategies of foreign pharmaceutical companies and compare the characteristics of drugs sold on the Chilean market that are patented by foreign multinationals to those that are patented by domestic companies or not patented. In addition, the study investigates whether and in which way foreign pharmaceutical companies 'work' these patents and analyze the effect of this choice on domestic companies behavior, in terms of drugs developed and marketed. The analysis relies on a mapping of patents filed in Chile to pharmaceutical products, as well as information on the way foreign companies 'work' their patents. To empirically measure whether and in which way firms ‘work’ their patents, the study combines information on patents and trademarks at the product level with information from the public health register. The results indicate a negative association between the share of foreign patents and the number of domestic drugs even within broad therapeutic classes. Foreign firms rely in particular increasingly on the filing of "secondary" pharmaceutical patents (patents on modified compounds, formulations, dosages, particular medical uses etc.) to extend basic patent protection in breadth and length to keep domestic generic producers off the market.

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