On Conflicts between Pharmaceutical Patent Protection and the Right to Life and Health Based on a Stackelberg Game.

Chunming Xu,Debao Zhu

doi:10.3390/ijerph18031119

Abstract

To solve the conflict between pharmaceutical patent protection and the right to life, health and increased patient satisfaction, drug prices can be regulated by levying an excess profit tax. An optimal tax strategy was formulated that not only could lower drug prices and improve public health and welfare, but also considers companies’ earnings. The strategy was based on the Stackelberg game theory as a bi-level mathematical model. In the model, the government is the leader, with patient satisfaction as the main goal, and pharmaceutical companies are the followers, with maximum drug revenue as the goal. The results show that under the premise of ensuring sufficient incentives for patent holders, the optimized tax on excess profit can effectively compensate for the shortcomings of pharmaceutical patent protection, alleviate the failure of market regulation of drug prices, improve patient satisfaction, and increase total social welfare.

Highlights

Conflicts between PharmaceuticalUnder the current system, there is an irreconcilable conflict between pharmaceutical patent protection and drug accessibility
The research and development (R&D) process for drugs is long and complex, with high investment and high risk; without pharmaceutical patent protection, pharmaceutical companies do not have the motivation to carry out R&D, which eventually leads to medical technology stagnation and brings great harm to public health [1,2]
Pharmaceutical patent protection inevitably gives patent holders a certain monopoly power, and drug prices are often set by the patent holders; there is the possibility of abuse of the dominant position to manipulate the market

Summary

Introduction

Conflicts between PharmaceuticalUnder the current system, there is an irreconcilable conflict between pharmaceutical patent protection and drug accessibility. The research and development (R&D) process for drugs is long and complex, with high investment and high risk; without pharmaceutical patent protection, pharmaceutical companies do not have the motivation to carry out R&D, which eventually leads to medical technology stagnation and brings great harm to public health [1,2]. Pharmaceutical patent protection inevitably gives patent holders a certain monopoly power, and drug prices are often set by the patent holders; there is the possibility of abuse of the dominant position to manipulate the market. Pharmaceutical companies with monopoly rights set drug prices significantly higher than the overall costs.

Objectives

Results

Discussion

Conclusion