The Interplay of Patents and Competition in the Russian Pharmaceutical Sector: An Everlasting State of Transition

Abstract

In the last 25 years, Russia has gone through a series of reforms changing dramatically her legal policies towards stimulation of innovation, including reform within the pharmaceutical sector. Throughout the Soviet period, intellectual property did not exist as an instrument of commercialization (much like private property in general), but different forms of competition were widely used to incentivize inventions and new technological developments. An optimal institutional design for innovation and scientific research is a hotly debated topic in the main leading industrial nations. The Russian case, which is still unfortunately mainly neglected in mainstream academic research, could be of great value for this debate in the West. The Russian pendulum’s swing from the Soviet system which abhorred any form of intellectual property rights to incentivize innovation to the extremely broad and pervasive IP protectionist regime introduced throughout the transition period of the recent market reforms – is a unique example of social and economic experimentation and consequently is able to provide invaluable empirical data for further studies of the modern challenges in the sphere of innovation and science. Russia has two important tales to tell about the organization of science and innovation. One is on the socialist experiment and another is the “keep the free market free” kind of narrative. Both cases have particular implications for the modern debate.