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IP & R&D in Developing Countries. Sean Flynn Washington College of Law WIPIP 2007. Monopoly Economics. Monopoly Econ (Simple). Norway ARV Demand. Profit Maximizing Norway. South Africa. SA ARV Demand. Profit Maximizing SA. Monopoly vs. Competition: AIDS drugs. Other Problems. - PowerPoint PPT Presentation
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IP & R&D in Developing CountriesSean Flynn
Washington College of LawWIPIP 2007
Monopoly Economics
Monopoly Econ (Simple)
Norway ARV Demand
Profit Maximizing Norway
Figure 5.2 Revenue per Quantity Sold
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
1 2 3 4 5 6 7 8 9 10
Quantity (units of 210 people)
South Africa
Figure 3.1 Income by Decile
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
1 2 3 4 5 6 7 8 9 10
Income Decile
Ann
ual I
ncom
e, U
SD
SA ARV Demand
Figure 4.1 ARV Demand if Price = 5% Income
0
200
400
600
800
1,000
1,200
1,400
1,600
1 2 3 4 5 6 7 8 9 10
Quantity (100,000s people)
Pric
e P
er Y
ear,
US
D
Profit Maximizing SA
Figure 4.2 Revenue per Quantity Sold (USD)
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
160,000,000
1 2 3 4 5 6 7 8 9 10
Quantity (100,000s of people)
Monopoly vs. Competition: AIDS drugs
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
2000 2001 2002 2003
Other Problems
Inefficient R&D investments 2/13 approvals are “significantly better”
Neglected meds Poor consumers Antibiotics
Unpooled buyers Marketing costs
Corruption of evidence (phrma detailing) Costly IP system
Administration, litigation Anticompetitive uses
IGWG
Fifty-ninth World Health Assembly 2006 calls for study of “needs-driven, essential health research and development” proposals
31 Developing countries call for R&D Treaty
Big Idea
Global patent pools Essential medical inventions, tamiflu
Prize funds for improving health care outcomes [developing countries] Only inventions licensed to the pool are eligible
Global agreement to support funding Base on country income Release from TRIPS/IP pressure
S 2210 v. TRIPS
Elimination of exclusive right in return for prize based on health outcomes
Applies to drugs & biological products
Payments for 10 years Remuneration from prize
fund “in lieu of” remuneration from exclusivity
27. patents in all fields of technology w/out “discrimination”
30: limited exceptions not unreasonably conflict
w/ normal exploitation 31: CL- Individual merits,
negotiation
Extra Credit
Can you argue that S 2210 complies with TRIPS? Limited Normal exploitation As a CL
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