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The patent buyout price for Human Papilloma Virus (HPV) vaccine and the ratio of R&D costs to the patent value

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  • Songane, Mario
  • Grossmann, Volker

Abstract

Human papillomavirus (HPV) is responsible for almost all of the 530,000 new cases of cervical cancer and approximately 266,000 deaths per year. HPV vaccination is an integral component of the World Health Organization’s global strategy to fight the disease. However, high vaccine prices enforced through patent protection are limiting vaccine expansion, particularly in low- and middle-income countries. This raises the question of the patent buyout price for Merck’s HPV vaccines (Gardasil-4 and 9), which hold 87% of the global HPV vaccine market. It also raises the question about the market power from patent protection, that we assess by estimating the ratio of R&D costs for Gardasil and its patent value. We estimate the patent buyout price for various groups of countries and in total. The estimated global Gardasil patent buyout price in 2020 is between US$ 15.33 – 18.32 billion (in 2018 US$), the estimated present discounted value of the profit stream for 2007-2028 amounts to US$ 22.29 – 33.08 billion, and the estimated total R&D cost is between US$ 1.10 – 1.21 billion. Thus, we arrive at a ratio of R&D costs to the patent value of the order of 3-5%, suggesting that patent protection provides Merck with extraordinarily strong market power.

Suggested Citation

  • Songane, Mario & Grossmann, Volker, 2019. "The patent buyout price for Human Papilloma Virus (HPV) vaccine and the ratio of R&D costs to the patent value," FSES Working Papers 510, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
  • Handle: RePEc:fri:fribow:fribow00510
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    Cited by:

    1. Deschênes, Sarah & Dumas, Christelle & Lambert, Sylvie, 2020. "Household resources and individual strategies," World Development, Elsevier, vol. 135(C).
    2. Hannes Wallimann & David Imhof & Martin Huber, 2023. "A Machine Learning Approach for Flagging Incomplete Bid-Rigging Cartels," Computational Economics, Springer;Society for Computational Economics, vol. 62(4), pages 1669-1720, December.

    More about this item

    Keywords

    Human Papilloma Virus (HPV) vaccine; Market power; Patent buyout price; Patent value; R&D costs;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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