Correspondence: fabio.montobbio@unicatt.it

Summary of the Session’s Theme and Objectives

The pharmaceutical industry is highly regulated and heavily dependent on intellectual property rights (IPRs) to incentivize innovation and bring drugs to the market. However, the interaction between IPR regimes, drug regulations, and geographic contexts leads to significant differences in pharmaceutical innovation across countries and regions and important disparities in drug access. This Special Session aims to explore how geographic factors shape pharmaceutical innovation and access to drugs through the lens of IPRs and regulatory frameworks. Each region’s approach to patents, market exclusivity, and approval processes influences where and how new drugs are developed and distributed. Drug regulations play also a crucial role in determining the types of pharmaceutical innovation that emerge. Some policies encourage incremental improvements to existing drugs, while others support more radical breakthroughs, such as entirely new molecular entities or drug repurposing strategies.

In addition, the institutional framework varies considerably across places and various intellectual property mechanisms-including different forms of exclusivity, Supplementary Protection Certificates (SPCs), and patent extensions-create regional differences in pharmaceutical innovation and drug approval timelines. These policies affect how long firms can maintain market exclusivity and how quickly new drugs become available. Finally, firms’ decisions on pharmaceutical innovation and drug access and government decisions about IPRs and regulation do not take place in isolation; they spill over across borders in multiple ways. There are many types of knowledge flows between countries, regulatory decisions in one region can have ripple effects elsewhere, and cross-border licensing and trade agreements influence which drugs reach different markets. Regulatory decisions in one country can significantly impact pharmaceutical drug markets in another and policies such as parallel trade in the EU, patent linkage in the US, and compulsory licensing in India and Brazil could shape global drug markets by affecting pricing, availability, and investment in new drug development.

This Special Session aims to bring together scholars from different disciplinary fields to examine how geography and regulation shape pharmaceutical innovation, providing insights into a better design of IPR and regulatory frameworks to promote health innovation globally. Good policies can reduce social costs and increase access to medicines and the experimentation of incentive mechanisms other than patents can contribute to a fairer and more efficient system.

List of Topics to Be Presented in the Special Session

• How intellectual property rights (IPRs), drug regulations, and institutional frameworks shape differences in pharmaceutical innovation across regions.
• The impact of varying patent regimes, market exclusivity rules, and approval processes on where and how new drugs are developed and introduced.
• The influence of drug approval timelines and market exclusivity extensions on innovation and access (e.g., Supplementary Protection Certificates in the EU vs. Patent Term Extensions in the US).
• The effects of international spillovers, regulatory interdependence on access to new drugs
• Non-patent systems like innovation prizes, advanced market commitments (AMCs), and open-source drug discovery to stimulate research while reducing market power prices.
• Geographical differences in price controls, compulsory licensing, or negotiated procurement (e.g., joint EU drug purchasing) to balance innovation and affordability.

Key References

Acemoglu, D., Linn, J., 2004. Market Size in Innovation: Theory and Evidence from the Pharmaceutical Industry. The Quarterly Journal of Economics 119,. https://doi.org/10.1162/0033553041502144\

Cockburn, I.M., Lanjouw, J.O., Schankerman, M., 2016. Patents and the Global Diffusion of New Drugs. American Economic Review 106,. https://doi.org/10.1257/aer.20141482\

Duggan, M., Garthwaite, C., Goyal, A., 2016. The Market Impacts of Pharmaceutical Product Patents in Developing Countries: Evidence from India. American Economic Review 106, https://doi.org/10.1257/aer.20141301\

Frakes, M.D., Wasserman, M.F., 2023. Investing in Ex Ante Regulation: Evidence from Pharmaceutical Patent Examination. American Economic Journal: Economic Policy 15, https://doi.org/10.1257/pol.20200703\

Gaessler, F., Wagner, S., 2022. Patents, Data Exclusivity, and the Development of New Drugs. The Review of Economics and Statistics 104, https://doi.org/10.1162/rest_a_00987\

Gamba, S., Pertile, P., Righetti, G., 2022. Spillovers of Pharmaceutical Price Regulations: evidence from the AMNOG Reform in Germany. Health, Econometrics and Data Group (HEDG) Working Papers, 

Kyle, M.K., 2020. The Alignment of Innovation Policy and Social Welfare: Evidence from Pharmaceuticals. Innovation Policy and the Economy 20, https://doi.org/10.1086/705640\

Kyle, M.K., 2006. The role of firm characteristics in pharmaceutical product launches. The RAND Journal of Economics 37, https://doi.org/10.1111/j.1756-2171.2006.tb00033.x\

Kyle, M.K., McGahan, A.M., 2012. Investments in Pharmaceuticals Before and After TRIPS. The Review of Economics and Statistics 94,