Yash Vats, BBA LLB, Fairfield Institute of Management and Technology, (Affiliated to Guru Gobind Singh Indraprastha University)
Chetna Vats, BBA LLB, Fairfield Institute of Management and Technology, (Affiliated to Guru Gobind Singh Indraprastha University)
ABSTRACT
The drugs and pharmaceutical sector in India has undergone a dynamic evolution over the past five decades, shaped by changing policies and economic paradigms. Initially, before 1970, the industry had limited production capacities. However, the landscape transformed during the late 1970s to the early 1990s, characterized by policy-driven growth that positioned the industry as a significant player, driven by policy-induced expansion. The subsequent phase, spanning the 1990s through the new millennium, marked a substantial shift in India's economic approach. Departing from historical protectionist policies, the country embraced economic liberalization in 1991 to foster global integration, ushering in a new era of openness. This transition came with challenges posed by international agreements like the Trade-Related Aspects of Intellectual Property Rights (TRIPS) under the World Trade Organization (WTO). The pharmaceutical sector, a cornerstone of India's economy, faced the dual task of adapting to the demands of the new patent regime while upholding its competitive edge. Patents, designed to stimulate innovation by encouraging research investments, also raised concerns about potential monopolistic practices and limited access to vital medicines. Following the reintroduction of product patents in alignment with TRIPS, multinational corporations (MNCs) capitalized on the opportunity to introduce new patented drugs at premium prices, particularly for life-threatening diseases. However, despite the anticipated positive impact on innovation, questions arose about the extent to which MNCs genuinely contributed to technological progress in India. Analysis revealed limited growth in research and development activities by MNCs post- TRIPS. Furthermore, instances emerged where patent rights were employed not to foster authentic innovation, but rather to stifle competition. Additionally, the inclination of MNCs to import patented drugs for marketing, instead of actively contributing to domestic production and technological advancement, added complexity to the landscape. The Indian pharmaceutical sector grappled with the intricate interplay between patent policies, strategies of multinational corporations, and the pursuit of genuine innovation. This nuanced narrative underscores the sector's evolution from humble beginnings to its current status as a focal point of policy shifts and economic considerations. Through these phases, the industry navigated the challenges brought about by globalization, patent protections, and the delicate equilibrium between promoting innovation and ensuring access to essential medications.
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