E-DRUG: Product patents and high prices in India
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One of the basic apprehensions of the re-introduction of product patent
protection in pharmaceuticals in India has been that product monopolies
will lead to very high prices. While high prices have been reported from
time to time, no systematic studies were available. In a paper, which can
be downloaded from
http://facultylive.iimcal.ac.in/sites/facultylive.iimcal.ac.in/files/WPS%20685_0.pdf,
we have tried to fill up this gap. The major conclusions of the paper are:
· 180 new drugs have been introduced in the Indian market between
1995 and 2010. Out of these 180 drugs, only 51 drugs are post-1995
molecules and hence patentable in India subject to Section 3(d) provisions.
· MNCs have monopolies for 33 drugs. Table 8 of the paper gives an
idea about the pricing policies adopted by the MNCs. The prices charged are
exorbitant particularly for life threatening diseases such as cancer. A
single injection of Roche’s anti-cancer drug, Herception, for example costs
INR 135200 (approx USD 2800).
· What has attracted widespread attention is India’s success as a
pharmaceutical exporter. What is less noticed is that imports of finished
formulations have been rising sharply. For matured generics, the MNCs are
entering into alliances with Indian companies for manufacturing. But for
patented drugs, MNCs are importing these from their home countries –
Switzerland – USA, France etc - rather than manufacturing these in the
country.
· With the taking over of some Indian companies, the aggregate
market share of the MNCs in India has dramatically increased from less than
20% to 28% in 2010. The MNCs are on the way to dominating the industry
again.
Sudip Chaudhuri
Professor of Economics
Indian Institute of Management Calcutta
Other email: sudip@iimcal.ac.in
Sudip Chaudhuri <sudip1953@gmail.com>