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The Impact of Patents on Innovation, Technology Transfer and Health: A Pre- and Post-TRIPs Analysis of India's Pharmaceutical Industry

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  • Rory Horner

Abstract

The debate surrounding the World Trade Organization's Trade-Related Aspects of Intellectual Property Rights (TRIPs) Agreement indicates that patents matter for development. Yet literature on the geography of knowledge transfer shows that knowledge is spatially sticky, suggesting that the impact of patents can be exaggerated. Using interview evidence, this paper explores how Indian pharmaceutical firms have responded to changes in patent law, including the introduction of more extensive patent protection in 2005 as a condition of TRIPs. A regime of limited patent protection for over three decades prior to TRIPs facilitated informal knowledge transfer and the emergence of a pharmaceutical industry with significant domestic capabilities. Contrary to some expectations, the Indian pharmaceutical industry has continued to grow post-TRIPs, with large domestic firms becoming involved in more formal technology transfer as part of an increasingly collaborative relationship with multinationals. This trend is also driven by a focus on the markets of developed countries, raising questions for the future sustainability of India's low-priced medicines. While changes in patent law can facilitate or inhibit a variety of aspects of development, the adaptation of the Indian pharmaceutical industry suggests that their impact must be related to the broader institutional setting, particularly the underlying domestic capabilities.

Suggested Citation

  • Rory Horner, 2014. "The Impact of Patents on Innovation, Technology Transfer and Health: A Pre- and Post-TRIPs Analysis of India's Pharmaceutical Industry," New Political Economy, Taylor & Francis Journals, vol. 19(3), pages 384-406, May.
    • Handle: RePEc:taf:cnpexx:v:19:y:2014:i:3:p:384-406
    DOI: 10.1080/13563467.2013.796446
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    References listed on IDEAS

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    1. Carsten Fink & Keith E. Maskus, 2005. "Intellectual Property and Development : Lessons from Recent Economic Research," World Bank Publications - Books, The World Bank Group, number 7443, December.
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    2. Kale, Dinar, 2019. "From small molecule generics to biosimilars: Technological upgrading and patterns of distinctive learning processes in the Indian pharmaceutical industry," Technological Forecasting and Social Change, Elsevier, vol. 145(C), pages 370-383.
    3. Thakur–Wernz, Pooja & Wernz, Christian, 2022. "Impact of stronger intellectual property rights regime on innovation: Evidence from de alio versus de novo Indian bio-pharmaceutical firms," Journal of Business Research, Elsevier, vol. 138(C), pages 457-473.
    4. Bjerke, Lise, 2022. "Antibiotic geographies and access to medicines: Tracing the role of India's pharmaceutical industry in global trade," Social Science & Medicine, Elsevier, vol. 312(C).
    5. Basant, Rakesh & Srinivasan, Shuchi, 2015. "Intellectual Property Protection in India and Implications for Health Innovation: Emerging Perspectives," IIMA Working Papers WP2015-04-01, Indian Institute of Management Ahmedabad, Research and Publication Department.

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