The United States and other rich countries have substantially strengthened the patent protection for pharmaceutical products over the past fifteen years. In this working paper, Carsten Fink describes the global shift in intellectual property policies and employs economic analysis to evaluate its consequences for developing countries. He argues that the conflict between firms seeking to protect their patents and developing countries wanting to increase drug access will increase as more protected drugs enter developing markets and as the need for R&D increases. He offers several suggestions for rich-country policymakers to better balance incentives for innovation with the needs of the world’s poor, who continue to suffer from diseases conquered in the rich world. His recommendations include
- encouraging a shift in investment from marketing and minimally improving existing drugs to investment in more serious and substantial R&D that would offer more benefits to the poor;
- shifting U.S. trade policy to allow developing partners to use the full flexibility of international intellectual property rules; and,
- supporting innovative approaches, such as Advance Market Commitments and innovation prizes, that give targeted incentives for companies to develop drugs for diseases that plague the poor world.