The Committee issued its report in December 2006: rules limiting patentability solely to new chemical entities or excluding microorganisms from patenting would violate India’s obligations under TRIPS.<sup>74</sup> The government must now decide how to incorporate this advice into law. A different committee, this one under the auspices of the Department of Chemicals and PetroChemicals and chaired by its Secretary, is exploring whether the government may share data that it obtains from branded chemical companies seeking regulatory clearance to sell their products with generic competitors seeking to develop products to launch upon expiration of applicable patents.

In all three cases the government will have to decide, first, which set of policies best serve India’s needs; second, whether those policies are consistent with India’s international obligations; and third, if they are inconsistent with those obligations, whether or not they confer enough benefits upon India to warrant adopting them anyway.

The implications of India’s choices can be significant. Patents on incremental improvements, the eligibility of microorganisms for patent protection, and prohibitions on data sharing will all make India a more attractive business venue for branded MNCs and biotech firms. Narrower concepts of patentability and weak data protection laws will serve the interests of low-cost drug producers. India’s policy decisions and eventual legislation in these areas can thus shape the future development of India’s pharmaceutical industry: the cost and availability of drugs to consumers, the number and types of domestic research opportunities, the number and types of drug manufacturing facilities that companies choose to locate in India, and the consequent shape of employment throughout the sector.

In other words, these remaining issues implicate precisely the cost-benefit analysis underlying the assessment of all IP regimes—and are thus worth considering in at least some detail. If India decides to grant broad patent rights on drugs and chemicals, it will attract some additional investment from MNCs, possibly motivating them to introduce R&D facilities in India and move their manufacturing facilities to India.

As _The Economist_ recently reported, India possesses several features that make it a particularly attractive place for at least some forms of medical research: In pharmaceuticals, the market in outsourced clinical trials, for example, is expected to reach $1 billion annually by 2010. Vasudeo Ginde, of iGATE Clinical Research, one of several dozen firms competing for a share of this cake, says that India has always had three essentials: doctors versed in Western ways, good (in places) hospital facilities, and huge numbers of patients. In addition, since the beginning of last year there has also been stronger patent protection for foreign medicines, so foreign firms are less nervous that conducting research in India will jeopardise their intellectual property. As in other outsourced businesses, speed is as important as cost: if 500 diabetics are needed, they can be found much more

> 74 R.A. Mashelkar, Chairman _, Report of the Technical Expert Group on Patent Law Issues_ (December 2006).

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