Diffusion of New Drugs in the Post-TRIPS Era

Abstract

We examine the international diffusion of new drugs under the post-TRIPS intellectual property rights regime. Even after controlling for drug characteristics and variation in national health expenditure, we find substantial differences across countries in the probability of a drug being commercially available, lowest in countries such as Brazil, China and India with historically weak patent protection. Notwithstanding obligations now in force under the TRIPS Agreement to provide patent protection for pharmaceutical products, sellers of new drugs are much less likely to have market exclusivity in these countries. Conditional upon being launched, a drug is five to 25 times more likely to be generic/multisource in these countries than in, for example, Spain.