Compulsory licence threats in a signaling game of drug procurement

Abstract: Under the TRIPS Agreement, developing countries (DCs) can use compulsory licensing (CL) to promote access to medicines and authorise the local production or import of more affordable generic medicines on their territory. For this reason, a literature examines the impact of such licenses on access to medicines in developing countries, on theoretical and empirical grounds. The aim of this article is to contribute to this literature by proposing a game theory model that can explain under what circumstances developing countries resort to CL and that fits with the stylized facts.