Examining the determinants of drug launch delay in pre-TRIPS India

Abstract

The dynamics of drug launch has been an under-researched area, especially in the context of developing countries, which have diverse disease profiles and weaker forms of regulation compared to developed countries. A limited set of studies, undertaken in recent years, on the diffusion of new drugs in developing countries indeed conjectures the importance of these factors in shaping drug launch dynamics. Taking a survival analysis approach, we investigate the delay of new drug launch in India for drugs launched in the German market during 1990-2004, when, due to weak intellectual property rights (IPR), not only the innovators but also domestic firms could launch new drug molecules in the country. The paper makes an attempt to distinguish between the commercial success of a new drug and its innovativeness. We find little association between these two characteristics of a drug. Also, the influence of global commercial success in shortening delay is much stronger than that of innovativeness. The study also finds interesting results for the threat of imposition of a strong IPR system, market structure and first mover advantages. Policy implications are discussed briefly.