Post-TRIPs Technological Behaviour of the Pharmaceutical Industry in India

Abstract

This paper analyses the post-TRIPs behaviour of domestic and foreign pharmaceutical firms in respect of technology acquisition, knowledge transfer and domestic R&D in India. It evaluates the prospects of development of capabilities by domestic firms in a scenario where they have also chosen to enter the markets for generics in developed countries and build relations of subcontracting with multinational corporations in the sphere of R&D and production activities. It suggests that due to the introduction of strong IPRs, pharmaceutical multinationals are now advantageously placed to control knowledge diffusion and integrate the local capabilities of a country like India into their own myopic and narrowly benefiting innovation strategies. Evidence available from the experience of developing countries like India on the diffusion of knowledge contradicts the claim of TRIPs advocates that its adverse effect on prices of patented medicines would be adequately compensated by the benefits of technology transfer and domestic R&D. The domestic industry is told to utilise emerging market opportunities for contract manufacture and R&D in a selective way. The government is asked to intervene with the aim to make the domestic industry undertake technological activities that would allow the Indian pharmaceutical sector to upgrade itself for the benefit of development of therapies for the needs of Indian people in particular and developing countries in general.