A Firm-level Analysis of the Vulnerability of the Bangladeshi Pharmaceutical Industry to the TRIPS Agreement: Implications for R&D Capability and Technology Transfer

Abstract

This study measures the different types of vulnerability experienced by Bangladeshi pharmaceutical firms since 2005, consequent upon the Agreement on Trade Related Intellectual Property Rights (TRIPS) of the World Trade Organisation (WTO). We find that that R&D-related vulnerability was the highest in the pharmaceutical sector in Bangladesh. Cluster analysis supports this proposition as 79.8% of the sampled firms had below average levels of innovativeness. We argue that the TRIPS transition period (which began in 2005 and is to end in 2015) has not been used effectively used by Bang- ladesh, the most technologically advanced LDC to create a strong technological platform for the pharmaceutical industry. Also, the expected process of transfer of technology has not taken place. We recommend that the post-TRIPS industrial policy for the pharmaceutical industry in Bangladesh should be designed and delivered with a key focus to improve the R&D and innovation capabilities of the domestic firms. Moreover, the WTO must evaluate the current mechanisms un- derpinning developed countries-LDCs technology transfer.