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CHINA AND INDIA AS SUPPLIERS OF AFFORDABLE MEDICINES TO DEVELOPING COUNTRIES

Sunday, 31st of July 2011 Print

 

  • CHINA AND INDIA AS MEDICAL SUPPLIERS

China and India as Suppliers of Affordable Medicines to Developing Countries

Abstract and full text .pdf are at http://papers.nber.org/papers/w17249



Tamara Hafner, David Popp

National Bureau of Economic Research Working Paper No. 17249, issued in July 2011

As countries reform their patent laws to be in compliance with the Trade Related Intellectual Property Rights Agreement, an important question is how increased patent protection will affect drug prices in low-income countries. Using pharmaceutical trade data from 1996 to 2005, we examine the role of China and India as suppliers of medicines to other middle- and low-income countries and evaluate the competitive effect of medicine imports from these countries on the price of medicines from high- income countries. We find that imports of antibiotics and unspecified medicaments from India and China significantly depress the average price of these commodities imported from high-income trading partners, suggesting that India and China are not only important sources of inexpensive medicines but also have an indirect effect by lowering prices through competition. As India is the leading supplier of medicines in Sub-Saharan Africa, this region will likely be affected most adversely.

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