Impact of Product Patent Regime on Pharmaceutical Companies in India

Abstract

During the period between 1970s and the beginning of the new century the Indian pharmaceutical industry and the Indian generic companies, in particular, witnessed high and consistent growth. This was the period when the process patent regime was prevalent in India and the industry was basically governed by severe price competition and governmental price control. During this period, the Indian IP law did not recognize product patents as a result of which Indian companies launched generic versions of proprietary products which were originally researched and developed by multinational companies (MNC’s). Indian companies were allowed to reverse engineer the process used by MNCs to manufacture their products and get process patents for the new process. However, in 1994 India became signatory to Trade Related Intellectual Property Rights (TRIPS) agreement under which product patent regime was adopted by India with effect from January 1, 2005. As a result of which, Indian companies could not copy patented molecules that had been researched and launched by MNC’s in India. Any molecule with a priority filing date after January 1, 1995 is eligible for product patent in India and cannot be manufactured or marketed as a branded generic in India. The new patent regime posed a grave challenge to Indian pharmaceutical companies to maintain their competitiveness and deliver on profitability targets. Based on secondary data analysis, this chapter outlines the existing patent regime, the Drug Price Control Act in India and its impact on the growth and development of the Indian pharmaceutical industry. This chapter also highlights how Indian pharmaceutical companies have reoriented their strategies to not just meet the new challenges, but also leverage on the opportunities arising with the implementation of this new patent regime.