Pharmaceutical patents: Cathartic or inhibiting

Abstract The debate between patent rights of pharmaceutical firms and the rights of the poor to equal access to health is an old one. The basic purpose of any patent system that grants a temporary monopoly to an innovator is to stimulate innovation and investment in the production of the newly innovated goods and services, which in turn gives supernormal profits to the innovator. However, the equity considerations dictate the spread of this knowledge in the public domain. The dilemma of the patent system is that, in encouraging R&D, it prevents the diffusion of innovation and consequently creates a non‐competitive situation. This paper examines the impact of patent protection on the number of patent filings by the pharmaceutical companies in India after it signed the Trade‐Related Aspects of Intellectual Property Rights (TRIPS) agreement and the trend in research and development expenditure by domestic firms. It questions the basis of this intellectual property right, especially, when a substantial amount of basic research is often carried out in the universities and federal funding is provided at the basic research and development level. It further investigates the success of various flexibilities provided under TRIPS which the Indian Patent Act has used and can potentially use, in comparison to other developed countries, to provide easy access to the medicines. The paper concludes by exploring other options available during public health emergencies and otherwise.