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The Hidden Cost Of Low Prices: Limited Access To New Drugs In India
Date: 9/12/2014

In support of its mission "to inspire, promote, encourage and facilitate international trade and investment in order to enhance economic growth and job creation throughout the world" the National Foreign Trade Council Foundation supports and conducts research and study on the problems and opportunities in international economics and foreign trade and investments. Following is a recent product.

India's treatment of pharmaceutical patents has been a subject of much attention since its implementation of the WTO's TRIPS Agreement through amendments in 2005 to India's Patent Act. Professors Ernst R. Berndt (MIT) and Iain M. Cockburn (Boston Univ.) have recently contributed an article to Health Affairs entitled, "The Hidden Cost of Low Prices: Limited Access to New Drugs in India."

Abstract: The pricing and accessibility of patent-protected drugs in low- and middle-income countries is a contentious issue in the global context. But questions about price have little meaning if a drug is not available for purchase, and the extent to which patent policy affects when (and if) new drugs become available in these countries has largely been overlooked. We examined data on the sales of 184 drugs approved by the US Food and Drug Administration between 2000 and 2009. We found that 50 percent of those 184 drugs went on sale in India only after lags of more than five years from their first worldwide introduction. More than half of the drugs that became newly available in India during the study period were produced and sold by multiple manufacturers in the country within one year of their introduction. The presence of multiple manufacturers indicates sharp competition and weak patent protection—factors that are disincentives to manufacturers to incur the costs of gaining access to the market. We conclude that modest patent and regulatory reform could bring the faster availability of a wider range of new drugs in India with limited impact on prices—a trade-off that merits greater policy attention.

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The Hidden Cost Of Low Prices: Limited Access To New Drugs In India

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