Optimal policy for biopharmaceutical drugs innovation and access in India

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Rashmi, Rakhi
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Useful inventions in the field of biotechnology have contributed significantly in recent years for the benefit of humanity as many different technologies in chemistry and biology are being combined to develop new therapeutics.1 For example, advances in the recombinant DNA technology, study of the cell growth, gene therapy proteomics, and bioinformatics contribute to the development of proteins can provide cures for many chronicle and hereditary disease as Alzheimer disease.2 These inventions are important for a country like India where there is widespread of these diseases. At the same time investment for these drugs innovations is negligible, therefore availability through technology transfer from the multinational innovator companies are desired. The empirical finding shows that there was negligible investment through foreign technology transfer too for the neglected diseases drugs innovation in India even after the TRIPs regime. Although after the introduction of product patents in India has enhanced the innovator’s incentive to innovate but still multinational biopharmaceutical companies have been vociferous with regards to higher patent standards and data exclusivity provisions in the Indian patent laws in order to transfer their technology in India.3 In the absence of such provisions they are reluctant in introducing new drugs in India. In biotechnology sector, discovery of entirely new drug takes years and costs million of dollars, where as the copy of the same can be manufactured in very little time and in fraction of the money spend in the discovery of new drugs. In biotech innovation only 22 percent of drugs that enter clinical trials eventually receive FDA approval.4 Also, it costs about $400 million, on an average, in out-of-pocket expenses to develop a new drug.5 Thus, in order to recoup the high and rising costs of biotech R&D, inventors need to capture enough of the economic returns to make their investment worthwhile through stronger patent protection. As patents grant an exclusive right to exploit a specific product or process for a set period of time, which protects new products from competitors, and enable exclusive right to market. Thus, stronger patent protection is crucial for the commercial success for the biopharmaceutical companies as they sustain the large and risky R&D expenditure needed for the product innovation.6 It also enables them to recoup the significant investments they have made in developing and discovering the new products and processes and bringing them to the market. Further, patent protection enables companies to generate sufficient income to support future research and develop new products. Patents, therefore, are the lynchpins of the biopharmaceutical industry.7 Thus, from the private interest point of view, patents are important as a reward to the innovator to stimulate private investment for research and development, which leads to economic growth.
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