María del Carmen García-Alonso

Export controls, market structure and international coordination

We look at the different ways of aggregating the exports of dual use products to give the security perception of exporter countries and their consistency with the relevant export control regimes. Also, we analyze different models of export controls highlighting the role of the perception of security, market structure and competition between exporting firms in determining the existence of multiple equilibria and therefore, the need for coordination between countries in setting export controls.

PARALLEL IMPORTS, INNOVATIONS AND NATIONAL WELFARE: THE ROLE OF THE SIZES OF INCOME CLASSES AND NATIONAL MARKETS FOR HEALTH CARE

This paper shows that regardless of any intra-country income differences, parallel imports result in a lower level of health-care innovation but, contrary to popular as well as conventional theoretical wisdom, a lower price in the Third World compared to market-based discrimination. Despite such a lower price, however, parallel imports unambiguously make all buyers in the Third World worse off when intra-country income disparity exists. On the other hand, even discarding the MNCs profit, there will be cases in which the richer country prefers price discrimination as well. That is, in those cases, no countries will have any incentive under the welfare criterion to undo price discrimination, contrary to Richardson (2002).

DETERMINING THE DEFENCE INDUSTRIAL BASE

This paper models the determination of the defence industrial base – the number of different military systems a country decides to maintain. High R&D costs means that few countries can afford to produce major weapons systems and the producers also import systems. Non‐producers rely on imports and we assume their demand is driven by regional arms races. Military capability is determined by the number of systems and the quantity and quality of each. We examine how the defence industrial base is influenced by military expenditures, R&D costs, export controls, the nature of regional arms races and a variety of other factors.

The strategic interaction between firms and formulary committees: Effects on the prices of new drugs

We study the strategic interaction between the pricing decisions of a pharmaceutical firm and the reimbursement decisions of a government agency which grants reimbursement rights to patients for whom new drugs are most cost-effective. If the reimbursement decision precedes pricing, the agency only reimburses some patients if the drugs private and public health benefits diverge. This is, there are consumption externalities and the variable cost of the drug exceeds the alternatives. Contrarily, if the firm can commit to a price before reimbursement, a strategic effect implies that by setting a sufficiently high price, the firm can make the agency more willing to reimburse than without commitment.

Parallel imports, drug innovation and international patent protection: A policy game

We consider a policy game between a high-income country hosting a drug innovator and a low-income country hosting a drug imitator. The low-income country chooses whether to enforce an International Patent Regime (strict IPR) or not (weak IPR), and the high-income country chooses whether to allow parallel imports (PI) of on-patent drugs or market-based discrimination (MBD). We show that, for a moderately high imitation cost, both (strict IPR, PI) and (weak IPR, MBD) emerge as the subgame prfect Nash equilibrium (SPNE) policy choices. For relatively smaller imitation costs, (weak IPR, MBD) is the unique SPNE policy choice. The welfare properties reveal that although innovation may be higher at the (strict IPR, PI) policy regime, the market coverage and national welfare of the low-income country, and the total welfare are all lower. This opens up the efficiency issue of implementing TRIPS and at the same time allowing international exhaustion of patent rights.

National-security export-quality restrictions in segmented and non-segmented markets

This paper examines the effect of international price arbitrage on the willingness to set unilateral export controls. The restriction on the quality of exports of security-sensitive products limits the outside option of domestic customers: if the product available on the international market is of low quality, the firm can charge a high price to domestic customers for its latest technology. This effect leads the government to be less willing to introduce export controls on security-sensitive products. D 2003 Elsevier Science B.V. All rights reserved.