Multinationals and monopolies: Pharmaceutical industry in India after TRIPS

Abstract

In January 2005, drug product patent protection was reintroduced in India to comply with the agreement on Trade Related Aspects of Intellectual Property Rights. How are the multinational pharmaceutical companies responding to the new policy environment? Is India likely to see monopolisation of the industry and high prices, which was the pattern before 1972 when India had product patent protection? Will the positive features of the post-1972 process patent era be diluted or negated? This study finds that the mncs have started marketing new patented drugs in India at exorbitant prices particularly for life-threatening diseases such as cancer. The manufacturing and importing behaviour of the mncs since the 1990s bear a close resemblance to that before the 1970s. Imports of high-priced finished formulations are expanding rapidly with manufacturing investments lagging far behind. The mncs are also expanding vigorously in the generic segments and are trying to grow not only organically but through mergers & acquisitions and strategic alliance with Indian generic companies.