Patent Races, “Me-Too” Drugs, and Generics: A Developing-World Perspective

The authors build a model of pharmaceutical markets in the light of a patent race among competing firms. The incentive for R&D is the patent on either the breakthrough or the me-too drug. A feature of the model that has not been analyzed before is the prevalence of insurance in developed countries as opposed to developing countries, such that the true burden of financing R&D falls to a greater extent on the former than the latter.