Patents and pharmaceutical drugs : understanding the pressures on developing countries

This paper offers a discussion to the question of why there are pressures on developing countries for introducing and/or reinforcing patent protection to pharmaceutical drugs. Patent protection is an important component of a complex strategy developed by the research and development intensive pharmaceutical drug companies of industrial countries to meet market competition. For legal and economic reasons, patents are fundamental instruments for allowing the drug-inventing companies to appropriate the returns from their inventions. Patents sustain high prices, which in turn provide rents to undertake further research and development, which in turn allows the invention of new drugs, etc. In recent years, increasing drug regulations have implied that effective patent protection to the research and development intensive pharmaceutical drug companies has eroded. Furthermore, competition from the generic drug companies has increased quite significantly. Restoring patent protection in industrial countries and making developing countries introduce patent protection, has become part of research and development intensive pharmaceutical companies'strategies to regain market share.