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Macroeconomics 2.3 Studyguide

Terms in this set (46)

Article Summary
Since 2008, the United States has been involved in trade negotiations over the Trans -Pacific Partnership
(TPP), a free trade agreement with 11 other countries on both sides of the Pacific Ocean. One area of the
negotiations involves patents and intellectual property rights in the pharmaceutical industry. A number
of developing countries have ignored international agreements concerning patents and intellectual
property rights as a way to benefit their domestic pharmaceutical industries, to the detriment of those
companies which have spent considerable time and money developing new medicines. For every 5,000 to
10,000 experimental drugs contemplated, only one will typically gain FDA approval, and this occurs only
after up to 15 years of research at an average cost of more than $1 billion. Also, 30 percent of the U.S.
workforce is either directly or indirectly employed in the pharmaceutical industry, so protection of these
intellectual property rights is very important for the U.S. economy.
Source: Doug Schoen,ȱȈIntellectual Property Rights Matter,Ȉȱ Forbes, September 24, 2013.
40) Refer to the Article Summary. If these developing countries continue to ignore the international
agreements which protect intellectual property rights, all of the following would most likely
occur except
A) pharmaceutical companies would decrease investment in the development of more
experimental drugs.
B) pharmaceutical companies would consider expanding operations to these developing
C) fewer patents would be issued to pharmaceutical companies.
D) fewer dollars would be spent on the development of new medicines.