One of the basic apprehensions of the re-introduction of product patent protection in pharmaceuticals in India has been that product monopolies will lead to very high prices. While high prices have been reported from time to time, no systematic studies were available. This paper authored by Sudip Chaudhury from IIM Calcutta attempts to look at the MNC’s behaviour in post TRIPS scenario to show that days of product monopolies are back in India.
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- 180 new drugs have been introduced in the Indian market between 1995 and 2010. Out of these 180 drugs, only 51 drugs are post-1995 molecules and hence patentable in India subject to Section 3(d) provisions.
- MNCs have monopolies for 33 drugs. Table 8 of the paper gives an idea about the pricing policies adopted by the MNCs. The prices charged are exorbitant particularly for life threatening diseases such as cancer. A single injection of Roche’s anti-cancer drug, Herception, for example costs INR 135200 (approx USD 2800).
- What has attracted widespread attention is India’s success as a pharmaceutical exporter. What is less noticed is that imports of finished formulations have been rising sharply. For matured generics, the MNCs are entering into alliances with Indian companies for manufacturing. But for patented drugs, MNCs are importing these from their home countries – Switzerland – USA, France etc – rather than manufacturing these in the
- With the taking over of some Indian companies, the aggregate market share of the MNCs in India has dramatically increased from less than 20% to 28% in 2010. The MNCs are on the way to dominating the industry again.
This paper deals with the behaviour of the MNCs in the post-TRIPS situation. The study shows that that the days of product monopolies and high prices are back in India. The MNCs have started marketing new patented drugs at exorbitant prices particularly for life threatening diseases such as cancer. Imports of high priced finished formulations are expanding rapidly with manufacturing investments lagging behind. The aggregate market share of the MNCs in the formulations market has gone up dramatically with the taking over of some Indian companies by the MNCs.