Title:
Optimal policy for biopharmaceutical drugs innovation and access in India
Optimal policy for biopharmaceutical drugs innovation and access in India
Authors
Rashmi, Rakhi
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Abstract
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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Date Issued
2008
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