Table 2 Empirical studies of the implications of patenting on price
Authors/ Ref. no. | Period | Setting (Country/medicines) | Objectives | Model | Method |
|---|---|---|---|---|---|
Watal (2000)/[17] | 1985-1992 | India, 22 patentable medicines in mailbox (varied in wide therapeutic areas) | The effect of product patents, price control and compulsory licensing on medicine prices and welfare. | Demand function estimation | Comparing effects from different demand functions—the constant elasticity demand and the linear demand function—and estimating price as a composite of the demand function. |
Fink (2000)/[18] | 1992 | India, two therapeutic groups: quinolones and synthetic hypotensives | The impact of product patents on medicine price and pharmaceutical company’s profit | Demand function estimation | Modeling a demand function as a two-stage decision-making process (chemical entity and brands under that chemical entity). Then estimating price and profit under each substitution elasticity among chemical entities and among brands. |
Boersma et.al. (2005)/[19] | 1996 to 2001 | The Netherlands, three medicines whose patents expired between 1996 and 2001 | To observe price and share prior to and after patent expiration | Observational study | Trend analysis of volumes and price (measured as defined daily doses (DDD) prior to and after patent expiries were calculated |
Suh et al. (2000)/[20] | 1984-1987 | USA, 35 chemical entities whose patents expired between 1984 and 1987 | The effect of generic medicine entry on price after patent expiration | Regression analysis | Collecting descriptive statistics of price after patent expiration and analysing the influential factors affecting price, which are number of multiple-source medicines, market growth, market size, profitability, severity of illness, duration of treatment, and number of years after patent expiration. |
Magazzini et al. (2004)/[21] | July 1987-December 1998 (Quarterly data) | USA, UK, Germany, and France, all medicines whose patents expired within the study period | Price and determinant of price after patent expiry | Regression analysis | Collecting descriptive statistics of prices before and after patent expiration. Using regression of the price with control of market share of the patented products, market size, % of sales to the hospital segment, the average market growth, the number of brand names, ratio of the average price of original products, etc. |
Grabowski and Vernon (1992)/[22] | 1983-1986 | USA, 18 expired patent medicines | The pricing and competitive behaviour after patent expiration | Regression analysis | Using descriptive statistics of price index of the overall market, original medicine, and generic medicine. Using regression of the determinant of generic entry. |
Griliches and Cockburn (1994)/[23] | 1987-1990 | USA, two anti-infective drugs: cephalexin and cephradine | The pricing and competitive behaviour after patent expiration | Observational study | Calculating the aggregate price indexes for a simple two-goods world where consumers buy either the brand or the generic version of a drug. |
Borrell (2007)/[26] | 1995-2000 | 14 antiretroviral therapy medicines in 34 low and middle income countries. | The impact of patents on medicine prices across developing countries | Regression analysis | Developing a price function as a composite function of the number of medicines in patent and non-patent regimes, number of generics after patent expiration, number of doses per day, efficacy, adverse reactions, and number of years in the US market. |
Supakankunti et. al. (1999)/[27] | 1987-1998 | Thailand, six therapeutic categories were chosen to represent the patented market | The effect of new patent law on price | Observational study | There were no patented medicines so these medicines were selected by other criteria. Descriptive statistics were used to report the price movement or trend of the real price and nominal price of branded and generic medicines. |
Limpananont et. al. (2004)/[28] | 2001-2004 | Thailand, antiretroviral therapy medicines | Price differences of patented and generic medicines | Observational study | Comparing and calculating the price ratio of patented and generic DDD prices |
Jones et al. (2001)/[29] | 1981-1994 | Canada, 82 medicines from the British Columbia Pharmacare Programme. | The impact of the Canadian Patent Act in 1987 | Regression analysis | Using descriptive statistics of prices before and after 1987 and log regression of generic market share, one factor, to predict market price. |
Challu (1995)/’ [30] | 1987- | Italy, 38 medicines | The impact of the 1978 patent law change | Observational study | Comparing new drug prices in Italy before and after the 1978 patent law. Using US prices as a reference. |