The Impact of TRIPS Compliant Patent Laws on R and D Activities of Indian Pharmaceutical Industry

Abstract

Patent protection in India existed since the British rule. Patent Act was first enacted in India as Act VI of 1856. The firs t provision for the patent of drug molecule appeared in The Patents and Designs Act 1911. This patent protection led to very high medicine prices and dominance of multinational pharmaceutical companies in India. To encourage the domestic pharmaceutical industry and to ensure availability of cheap medicines to Indian citizens the Patent Act 1970 was enacted. The act made provision for process patents for pharmaceuticals and agro-chemical products. This Act paved way for exponential growth of Indian pharmaceutical which became world leader in the manufacture of generics. India signed the TRIPS Agreement in April 1994. At that point in time, India‟s existing enactment of the Patent Act of 1970 directly contravened Article 27 of the TRIPS Agreement. To comply with this article product patent was reintroduced in India. This changed the level playing field for Indian pharmaceutical companies which were earlier spending a dismal percentage of total sales on R and D activities are now spending significant amount on R and D activities. Pattern of „R and D‟ by Indian pharmaceutical companies has also changed. Earlier the Indian pharmaceutical companies were taking process patents but now are taking product patents. The present paper is an attempt to assess the R and D activities of Indian pharmaceutical companies in changed legal scenario. Data from various secondary sources has been taken and suitably analyzed to achieve a detailed account of R and D activities of Indian pharmaceutical companies in pre and post TRIPS period. The paper provides an insight to Indian pharmaceutical industry.