Licensing Life-Saving Drugs for Developing Countries: Evidence from the Medicines Patent Pool

Abstract

We study the effects of the Medicines Patent Pool – an institution that pools patents across geographical markets – on the licensing and adoption of life-saving drugs in low- and middle-income countries. We show that there is an immediate and large increase in licensing when a patent is included in the MPP. There is also evidence that the pool increases actual entry and volume of sales, but these impacts are much smaller than on licensing, which is due to the geographic bundling of licenses. The paper highlights the potential of pools in promoting diffusion of biomedical innovation in developing countries.