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I have a new paper in the Journal of Globalization and Development. “Evaluating the Impact of Data Exclusivity on the Price of Pharmaceutical Imports” finds large increases in the price of imported medicines when the U.S.’s trading partners implement data exclusivity to meet FTA obligations. The full impact of data exclusivity laws took many years to become apparent though observation of aggregated prices, because the laws themselves only applied to medicines new medicines.

It may sound familiar to readers of this blog, because this is the culmination of an ongoing project. I first presented data associating data exclusivity with higher drug import prices at the 2018 Global Congress on Intellectual Property. I workshopped the project with the Boston University Working Group on Trade and Access to Medicines, and published an earlier version of the as a BU working paper. The version published by the Journal of Globalization and Development is a heavily revised version of the BU working paper. It uses newly developed difference in difference methodologies appropriate for the study of legal changes that occur in different years, and that have impacts that vary over time.

The article is behind a paywall, so email me if you would like a PDF.  The abstract is below.

EVALUATING THE IMPACT OF DATA EXCLUSIVITY ON THE PRICE OF PHARMACEUTICAL IMPORTS

Michael Palmedo  
Journal of Globalization and Development
https://doi.org/10.1515/jgd-2021-0016

ABSTRACT

Data exclusivity is a form of intellectual property (IP) protection that restricts competition by preventing generic firms from relying on originator test results to win regulatory approval. It is a TRIPS-Plus intellectual property provision often required by Free Trade Agreements (FTAs). This study analyses the impact of data exclusivity on aggregated pharmaceutical import prices in a set of 16 countries that enacted data exclusivity as required by FTAs, and six comparator countries that had not introduced this type of IP protection. It uses a difference in differences methodology appropriate for datasets in which treatment occurs at different periods, and in which treatment affects are heterogeneous over time. Between 1996 and 2014, pharmaceutical import prices were 14–20% higher on average in countries that had enacted data exclusivity than those that had not. Since these laws only applied to products entering the market after their enactment, their impact took time to become apparent. It eventually became quite large. The first statistically significant difference in prices occurred seven years after countries introduced data exclusivity. Nine years after these changes, the price differences averaged 175–210%.