India’s recently elected Prime Minister, Narendra Modi, will visit the U.S. later this month. One of the sticking points in the U.S.-India relationship is weakness in India’s laws governing intellectual property (IP). The Global Intellectual Property Center of the U.S. Chamber of Commerce ranks 25 countries in its Global IP Index, and India comes in last place. Indian growth will continue to lag as long as this persists: Researchers have demonstrated the positive relationship between IP protection and a county’s prosperity.
One of India’s weak spots is patent protection for new prescription drugs. New research also shows, counter-intuitively, that this limits patients’ access to new medicines. Professors Ernst R. Berndt and Ian M. Cockburn analyzed the 184 new medicines approved by the U.S. Food and Drug Administration between 2000 and 2009. It took more than five years for half of those drugs to become available in India.
Ten years after being launched in the U.S. or elsewhere, almost one quarter of the new medicines were still not available in India. The authors also compared when the drugs were available in other developed countries. For example, in 2010, 160 of the new medicines were available in Germany, but only 111 in India.
Berndt and Cockburn conclude that India’s patent law is to blame for this long lag in access versus the U.S. and other countries. The authors found that half of the new medicines faced copycats within one year of launching in India, and 85 percent face copycats within three years. In Germany, by contrast, none of the drugs faced copycats within five years.
These results indicate that effective patent protection is not available for most prescription drugs in India. So, it is unsurprising, if regrettable, that innovative drug-makers are reluctant to sell their medicines there. Investors are also unlikely to put their capital at risk in Indian drug companies that seek to discover new medicines.
It appears to be a lose-lose situation: An innovative pharmaceutical industry is unlikely to grow out of India, and Indian patients will continue to be deprived of new medicines, until India’s patent law is fixed. The new government recognizes the need for laws that protect intellectual property. However, it has not yet announced decisive steps to improve this situation.
Why the delay, in the face of mounting evidence of harm? India has a world-leading generic pharmaceutical industry, which rose to global prominence largely because India had no pharmaceutical patents at all until 2005. India could not take full advantage of global free trade without signing onto international treaties meant to level the playing field. So, India started granting pharmaceutical patents. However, they are limited in important ways, and Indian jurisprudence has confirmed innovative firms’ lack of confidence in the patent regime.
India’s generic drug industry is an important national asset, which benefits patients worldwide. It is unlikely that U.S. patients would be able to buy a month’s worth of generic medicines for four dollars without Indian generic drug-makers competing in the market. However, a strong branded pharmaceutical industry and a strong generic industry are not mutually exclusive. The U.S. and other developed countries have successful, home-grown generic competitors as well as brand-name drug-makers.
Indian patients and Indian medical innovation will benefit when India improves its patent law to the highest global standard.
