Legal support for intellectual-property rights is essential to innovation. In health care, patents protect intellectual property in pharmaceutical innovation. Not all countries respect pharma IP equally, according the Global IP Index.
India has long been a problem because of its successful generic drug industry. Generic drug makers make copies of brand-name drugs once their patents have expired. This means that they have an incentive to lobby for weaker patents. If the political economy of a country’s pharmaceutical industry is dominated by generic competitors, it is difficult for innovative companies to gain a foothold.
One Indian innovative drug maker is speaking out:
Hyderabad-based Hetero Pharma that the country has lost nearly $10 billion worth of investment by not respecting IP norms. “The Compulsory Licence (CL) that we issued did more harm to our image than actually helped patients,” Srinivas Reddy, director, Hetero Pharma, told ET. (Economic Times)
A compulsory license is one which the government orders a patent-holder to issue to a generic competitor at low-market fees. Let’s hope more Indian entrepreneurs speak out like Mr. Reddy has.
I have read several articles on the National Pharm. Price Board in India. And while that surely does not make me an expert, I feel that this post is one-sided.
Price controls on drugs make a huge positive difference to the millions of indians who are poor and uninsured….
http://www.ibtimes.com/indias-generic-drug-healthcare-policy-benefit-millions-poor-patients-721699
Now there can be a vigorous debate on long term effects of price controls. They may be negative in the long run. But that takes a little proving.
Thank you. The problem is that India is a country that does not want to be poor any longer, and is moving along the curve to an innovation economy. That is why her entrepreneurs are speaking up.
John you may be oversimplifying this issue, for these reasons:
1. India could become the most innovative economy in the world tomorrow morning, and it would still have many millions of poor people. These people do not have a prayer of affording insurance or American prices for drugs.
2. Israel is known as an extremely innovative economy, all the while having some price controls on drugs….
http://www.israelnationalnews.com/News/News.aspx/174630#.VSRyByhvaJV
3. Innovation is good, don’t get me wrong. Yet the American model of charging what the market will bear for drugs strikes many observers as a monopolist’s excuse for price gouging. The customer for many drugs has no alternative.
Thank you. And I suppose we could say the same about Canada (as Israel). However, I note that the article on Israeli drug prices included the factor of exchange rates. People often underestimate this impact on relative drug prices.