Date of Completion

7-31-2013

Embargo Period

7-31-2013

Keywords

economics, patent, pharmaceutical

Major Advisor

Thomas Miceli

Associate Advisor

Richard Langlois

Associate Advisor

Kathleen Segerson

Field of Study

Economics

Degree

Doctor of Philosophy

Open Access

Open Access

Abstract

Patent protection has proven particularly important to the pharmaceutical sector among R&D-intensive industries. Despite a common patent term for all inventions, the effective patent life for a new pharmaceutical is shortened by the regulatory approval process. The Hatch-Waxman Act of 1984 created patent term restoration to address the sector-specific erosion of patent incentives. The Act restores a percentage of patent time lost during the clinical trials process, extending the patent’s expiration date and delaying the entry of generic competitors. Restoration therefore introduces additional strategic considerations for the firm, as their investment decisions affect the time spent completing clinical trials. This dissertation investigates these private incentives and the welfare tradeoffs created by incentivizing pharmaceutical R&D investment through patent term restoration.

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