Drug Patents and the Indian Pharmaceutical Sector


The pharmaceutical industry has benefited greatly from the rapid advancement of technology that has taken place over the recent decades. It requires years of research and experimentation to develop even one drug. Thus, this field is highly knowledge-driven. Firstly, the research in this area is highly unpredictable. Most of the time the research yields no result. Secondly, the pharmaceutical companies try to make the most of the research. In, addition the research requires a significant amount of funds. However, if there is a lot of unpredictability how do pharmaceutical companies stay financially stable in conducting research? The drug patents come to their rescue. These companies utilize intellectual property rights to protect their best interests.

The necessity of drug patent in the Indian Pharmaceutical Sector

Intellectual Property Rights and Indian Pharmaceuticals

Since the industry focuses on research and development, it needs to protect the same. Most pharma corporations shield themselves by relying appreciably on drug patents in India.

Keeping intellectual property rights in mind, India has developed a system of patent law to ensure that both public and companies gain equally. India is also a part of the General Agreement on Trade and Tariffs (GATT) which has helped in making drug patent more efficient.

The first major change happened after India entered into the GATT in 1994. This allowed Indian pharmaceutical companies to patent their drug manufacturing process. During that time the drug patent was given for seven years. Many changes also occurred in the Indian market. Further India also had to comply with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Indian pharmaceutical companies had to meet the minimum standard requirement of TRIPS. Thereafter, India implemented a product patent system that was valid for 20 years. Before 2005 multinational corporations and American corporations had a major impact on the Indian healthcare sector. After 2005 Indian companies had started to dominate the market owing to the decreased market shares of the multinational corporations.

Types of Drug Patents

A patent is a legal document that entitles its owner to protect his or her invention or idea against intellectual property theft. This type of Intellectual Property Right protects an innovation from being used, marketed, or sold by others without its owner’s permission. The government grants it to ensure that the owner has complete control over their creation. A governing authority, however, conducts several rigorous checks before granting a patent to make sure that the innovation’s plan, product, or process is innovative and unique. On the other hand, drugs are patents that are intended to protect a specific drug or medicine from being marketed, manufactured, or sold by another company.

There are two types of drug patent:

  • Process Patent- as the name suggests, the process of manufacturing a drug is patented and not the drug. Other competitors in the market can sell the same drug using different manufacturing processes. This leads to a lot of copies and generic medications.
  • Product patent- The actual drug is patented which prevents others from manufacturing it. This type of patent ensures competitors don’t make the same drug. This leads to a monopoly in the pharmaceutical sector.

Indian Pharmaceutical Sector follows the following system:

  • Patented Drugs- Mandatory licensing is required to manufacture or supply patented drugs.
  • Patent-expired/Non-patented Drugs– if the patent has expired or it is a non-patented drug, any pharmaceutical company can continue to manufacture or supply such drugs to both the domestic and export market.
  • Ever-Greening by Pharma Companies

The ever-greening strategy used by pharma companies refers to making minor changes to an existing drug product and filing for a separate drug patent. For instance, a pharma company could use the same molecular formulae with an altered structure and register a new drug patent. They could also add a new ingredient that makes no difference to the product and file another drug patent. They could also try to hinder a competitor’s research by filing false infringement claims against these new drug patents. Although these strategies are legal, they increase the cost of medications for the public and hence should be scrutinized.

Role of Drug Patents

Before Drug patents in India, the pharmaceutical sector faced many challenges. The reason for this was that generic drug companies did not invest heavily in research. They used to sell drugs at lower prices and consolidate the market share. Such companies were obstructing the path of large-scale pharmaceutical companies that were assisting in the development of new drugs. However, patent law aided pharma companies in dealing with this situation effectively.

In addition, drug patent help pharmaceutical companies to maintain a healthy profit margin. They should not be used as an attempt to monopolize the market. The Competition Act 2002 was introduced to prevent monopoly. Drug patent laws help in the protection of intellectual property rights and competition. This protection ensures welfare for both companies and the public.


The purpose of drug patents is to encourage innovation and maximize the greater good, so they should be used to encourage innovators and make healthcare more affordable. We need to approve generic drugs even more quickly if we want to help people. To garner investments, pharma companies with branded products must obtain patent protection. In the pharmaceutical and biotechnology industries, patents are therefore a fundamental incentive for innovation, which is why they need to be protected.

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