Competition Law in Indian Pharma Sector

Topics: Competition law, Pharmaceutical industry, Refusal to deal Pages: 9 (2967 words) Published: April 6, 2013
Competition Law in Pharma Sector

1. Introduction
The pharmaceutical sector is among the highly regulated sectors across the globe. Yet, it is often noted that the required degree of competition is often missing from these markets. India being one of the biggest emerging markets of the pharmaceutical sector, there has been less a comprehensive study on the pharmaceutical industry from the perspective of competition law and policy. Moreover there are apprehensions that some of the anti-competitive practices go unscrutinised in India due to a variety of reasons. Hence giving us good reasons to look into current state of competition prevailing in the pharmaceutical sector in India.

To start with regulation of anti-competitive practices in pharma sector, to conserve poor and sick, there is no explicit provision or Fundamental right protecting right to good health, but that is submitted to be deemed as under Article 21 of the Indian Constitution. Article 21 protects right to life and this obviously includes right to a healthy life, which imposes the duty on Government of India to provide to every citizen adequate and required medicines to ensure a healthy citizenry. What is discussed here as a violation of this right are the anti-competitive, illegal and unethical practices undertaken by the Pharma Majors, to keep their branded drugs rated high in prices and coaxing patients to delve their pockets for a better life. This is not possible for maximum of Indian population as more than 70% of Indian Population can't afford big brands in medicines. Special mention is required for drugs to which no alternate is available and whose generic version has still not come out, and there remain to options for patients as to whether to pay hefty amounts or to die without treatment.

2. An Overview of Indian Pharma Industry
The Development in Indian Pharmaceutical Industry can be traced to recent 60’s when the Indian Government adopted measures encouraging Drug manufacturing within the country. Later in 1970, The Patents Act of 1970 was passed which gave the path to real development of Pharma industry and to become today one of the most powerful industry influencing country’s economics. Earlier India was dependent on drug import from other countries, but today 95% of the drug requirement is fulfilled from within the country without requiring any imports, thus saving from deficit.

The pharmaceutical industry is an important source of health care for billions of population globally and in India. Thus there is a need to regulate trade in this sector as well. The industry owes its present position to the Patents Act 1970. The January 1st, 2005 amendment to the Act, in conformation with TRIPS added protection to product patents and thereby gave a boost to the pharma industry at unbelievable proportions. The benefits from the 2005 amendment can be listed as below: (i) Reduced manufacturing costs in terms of license fee

(ii) Reduced the costs involved in research and development
(iii) Diffusion of technology and knowledge through reverse engineering

Legal changes in India in 2005 made it considerably more difficult to produce “new” generics. Foreign pharmaceuticals, which enjoy 20 years of patent protection, can no longer be copied by means of alternative production procedures and sold in the domestic market. Hence, a reorientation was required in India’s pharmaceutical industry. It now focuses on drugs developed in-house and contract research or contract production for western drug makers.

By contrast, the weakening of the patent system and numerous protectionist measures sped up the development of a major national pharmaceutical industry in India, which made it possible to provide the population with a large number of drugs. Following features can be noticed:- 1 Net Worth 8 Billion Dollars.

2 Growth Rate of 8-9% PA.
3 4th in the World in terms of Volume of Drug Output.
4 Exports to nearly 212 countries.
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