Intellectual Property and External Consumption Effects

There is a long-standing literature that recognizes that an efficient solution in correcting a consumption externality is through applying subsidies and taxes that line up private incentives with social ones. This book expands the way existing economic theory deals with products with external effects--products that cause harm or benefits to people other than those consuming the product, such as antibiotics and AIDS drugs. The author argues that existing theory is overly static and does not properly account for the long-term effects of technological change, significantly impacting government policy on pharmaceutical R&D incentives and distribution.