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India's Product Patent Protection Regime: Less or More of “Pills for the Poor”?

Gehl Sampath, P

Journal of World Intellectual Property   9 (6) 694-726

November 2006   (First published online October 2006)

The year 2005 marks the end of the transition period for many developing countries with competent pharmaceutical sectors that previously competed in supplying generic versions of patented drugs to least-developed countries (LDCs), thereby inducing price competition and enhancing access to medicines. In a post-2005 scenario, the critical issue is whether LDCs without adequate manufacturing capabilities can make use of compulsory licensing expeditiously to induce price competition and secure lower prices.

This article uses empirical evidence collected during a firm-level survey of the Indian pharmaceutical sector to generate evidence on emerging strategies of firms. It shows that the vigour of compulsory licensing as a price-leveraging instrument post-2005 is incumbent mainly on its economic feasibility. It shows that Indian firms view the market potential (in terms of market size and profits involved in such supply, especially if they have to make specific technological investments to produce the drug) of the mechanism much more severely than before, and may be less inclined to engage in such production if their commercial expectations are grossly unmet. The analysis assesses implications of emerging strategies of firms in the Indian pharmaceutical sector for access to medicines both domestically and internationally, and highlights the challenges involved.