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Pharmaceuticals, Product Patent and TRIPS Implementation

Dinesh Abrol, Sivakami Dhulap, Malini Aisola and Nidhi Singh
ISID Working Paper 191, March 2016

In this article the authors examine the impact of delayed product patent implementation on the introduction of new drugs by domestic and foreign firms in India. Examination focuses on how much the foreign and domestic firms succeeded in using the freedom to operate obtained through delayed TRIPS implementation in the domestic pharmaceutical market. Two distinct data sets have been created, one that relates to the priority year of primary patent of active pharmaceutical ingredient for the new drugs introduced after 1995 and the other that relates to the ability of foreign and domestic firms to compete in the domestic market in the case of new drugs. Evidence of the ability of domestic firms to compete with the “multinational originator companies”is analysed. Analysis confirms that in the case of more recently approved drugs the market power of foreign firms is on the rise, and the share of patented compounds is fast increasing in the case of anti-cancer, cardiovascular, central nervous system, diabetes, urology and few more groups involving therapies for acute and chronic conditions. However, it also suggests that t he market power of“multinational originator companies” would have been even greater if India had opted for early TRIPS implementation like many of the countries in Latin America did.Finally it suggests that since the patented monopolies are on the rise in products where the market demand is growing  and the newer drugs are fast becoming unaffordable in the case of chronic and acute conditions related therapies there is an urgent need to implement the provisions of compulsory licensing and introduce public procurement and price control to allow the interested firms to participate in the introduction of patented compounds through local production to ensure affordable access.

Courtesy: ISID
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