To What Extent are Pharmaceutical Prices Determined By Patents? A Case Study of Oncology Medicines in Thailand

Abstract

This study seeks to assess the relative impact of patent status as a component of pharmaceutical prices while controlling other <span style="mso-ansi-language:EN-US; mso-bidi-language:TH" lang="EN-US">market and medicine characteristics on the retail prices of oncology medicines in Thailand. Ordinary Least-Squares (OLS) regression model of log prices as a function of supply and demand factors was developed and data fitted to establish the relationship and the effects for each factor. <span style="mso-ansi-language: EN-US;mso-bidi-language:TH" lang="EN-US">The main finding of the model is that patented status is associated with a price of approximately 144-206% that of an equivalent generic. Market characteristics also affect price, e.g. larger sales volumes, a more competitive market and a longer product life are associated with price around 3-30% higher. The scale of the influence of patent status over other factors confirms the view that addressing patent policy is the most effective option to bring down price, and proves support for invoking TRIPS-flexibilities such as, compulsory licensing, parallel importation or other exceptions to patentability.

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