quickly in India. And there are more inoperable cancers, because fewer are detected at earlier stages.<sup>75</sup> The stronger patent protection that the 2005 amendments introduced is already helping to attract clinical research. Even stronger forms of protection will likely accelerate that trend, and open the door to broader research facilities with consequent spillovers into domestic education, training, and innovation. Weaker protection, or poor enforcement of the recently added rights, will delay or deter such investments from abroad.

The downside of broader patent protection in these areas, however, is both more immediate and more certain. Indian pharmaceutical patents will raise the prices of drugs in India and reduce the ability of India’s low-cost drug manufacturers to export to developing countries that have chosen not to award such patents. The broader are the rights that India grants, the higher these costs will rise. In thinking through these remaining statutory issues, the government must decide whether the benefits of promoting FDI, domestic innovation, and their spillovers into education, training, and commercialization exceed the costs of restricting access to international innovation and reducing the effectiveness of India’s producers at serving the low end of the international market (Box 10).

# **Box 10 Some Key Questions about IPRs in the Pharmaceutical Industry**

- Should India restrict pharmaceutical and chemical patents to newly discovered compounds?

- Should India allow patents on minor pharmaceutical advances, including those that lead to “evergreen” products in which branded drug manufacturers will always maintain an exclusive patent on the most advanced form of their products?

- Should microorganisms or other life forms synthesized in a laboratory be considered patentable subject matter?

- • Should genes or genetic therapies be considered patentable subject matter?

- Should branded drug manufacturers be allowed to retain as proprietary the clinical data that they provide to the Government of India when seeking regulatory clearance to market their drugs?

- Should the government share clinical data obtained from branded drug manufacturers with their generic and low-cost competitors?

- Should India adopt a pharmaceutical IP system designed to attract MNC research, including but not limited to clinical research?

- Should India adopt a pharmaceutical IP system designed to motivate domestic drug <u>production?</u>

The choice is stark. India must decide what type of drug and chemical companies it wants: Decisions in one direction will protect but not guarantee India’s position as a powerhouse in lowcost drug manufacturing and complicate any desire to move into high-end medicine or medical research. Decisions in the other direction will create the possibility of becoming an important player in medical innovation, but complicate the future of low-cost drug producers. Either approach will make some aspects of India’s negotiations with MNCs and foreign governments easier and others harder: narrow patent rights will ensure continued international tension over statutory issues, while broad patent rights will shift the debates from statutory reform to enforcement.

> 75 _The Economist_ , “If in Doubt, Farm it Out,” June 1, 2006.

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