TRIPs and the pharmaceutical industry in India: A case study of the antibiotic sector
Description
This dissertation examines the impact of India signing the TRIPs agreement on the Indian pharmaceutical industry. Estimates of the potential economic effects of strengthened product patent protection are calculated for the antibiotic sector. To examine this industry from the context of trade-related issues an in-depth characterization of the institutional structure that regulates this industry is discussed in the first chapter. This is followed with a historical background of the Indian pharmaceutical industry, which provides the base for modeling the antibiotic sector The market structures for the seven antibiotics markets selected are modeled either as a monopoly with a competitive fringe, or as a duopoly with a competitive fringe. Constant elasticity demand and supply functions are assumed for the computational model. Data from the ORG report on the antibiotic segment is used in constructing the computational model. Chapter 4 reports the findings of the simulation exercise. The effects on price, output, producer and consumer surpluses, and welfare are detailed. One observes that enhanced patent protection does not necessarily result in higher market prices. The impact on prices depends on the market structure and the shift of the residual demand curve facing the oligopolist(s). With regard to welfare, across all the antibiotic subgroups, there is a decline under the new patent regime for all assumed market demand elasticities For India, the economic impact of the adoption of this strengthened product patent regime will be felt only after the transition period is over. The combination of national interest, political relevance and the spotlight on issues of providing stronger IPRs in the WTO-TRIPs agreement lends itself to study. This study contributes to the growing body of literature on this issue