Multinationals and Monopolies Pharmaceutical Industry in India after TRIPS

Abstract

India abolished product patent protection in pharmaceuticals in 1972. Before 1972 the industry was underdeveloped and the MNCs charged very high prices for patented drugs. After 1972, the monopoly power of the MNCs was eliminated, the industry experienced rapid growth and India emerged as a major player in the global pharmaceutical industry receiving world-wide recognition as a low-cost producer of high quality. In accordance with the TRIPS agreement, drug product patent protection has been re-introduced in India since 1 January 2005. This paper deals with the behaviour of the MNCs in the post-TRIPS situation. The study shows that that the days of product monopolies and high prices are back in India. The MNCs have started marketing new patented drugs at exorbitant prices particularly for life threatening diseases such as cancer. Imports of high priced finished formulations are expanding rapidly with manufacturing investments lagging behind. The aggregate market share of the MNCs in the formulations market has gone up dramatically with the taking over of some Indian companies by the MNCs.