Advent of Intellectual Property Rights in the Pharmaceutical Industry

18 Pages Posted: 15 May 2011

See all articles by Pallavi Mahajan

Pallavi Mahajan

affiliation not provided to SSRN

Date Written: May 13, 2011


Pharmaceutical Sector is one of the most diverse, knowledge driven, technology intensive growth areas, where fast track advancements can surely generate significant resources. India’s pharmaceutical sector is currently undergoing unprecedented change. Much of this is due to country’s introduction, on January 1, 2005, of a system of product patents in addition to process patent, with the signing of the TRIPS1 Agreement and implementation of the Patents (Amendment) Act, 2005.

The paper concentrates on the issues regarding Intellectual Property Rights (IPR) and the challenges faced by the Pharmaceutical Industry.

The research shows that with the new IPR2 regime, India is hopeful to capture 20-25 percent of the world’s generic market in the pharmaceutical sector by 2010. It has also led to the return of the pharmaceutical multinationals, many of which had left India during 1970s. The new age industry competition will see a paradigm shift from comparative advantage of cost and natural resources to competitive advantage of products and processes.

However, on the flip side, the research throws light on the relentless march of IPR, which is running far ahead of the ethical, legal, regulatory and policy frameworks needed to govern its use. Product and process patent provide drug companies with monopolies over the production and marketing of medicines, allowing them to fix prices at higher rates to maximize profits. The 20-year protection from patent rights and the obligation to recognize product and process patent will eliminate competition from generic pharmaceutical producers. Thus, the amendment is likely to negatively affect people’s access to medicines. The question on the availability of life-saving drugs also arises. The findings of the paper are that the TRIPS Agreement should be amended so as to bring a proper balance between corporate and public interest.

Suggested Citation

Mahajan, Pallavi, Advent of Intellectual Property Rights in the Pharmaceutical Industry (May 13, 2011). Available at SSRN: or

Pallavi Mahajan (Contact Author)

affiliation not provided to SSRN ( email )

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