This project theoretically examines the potential effect of product patent on the availability of an essential drug in developing countries like India under different scenarios. Previous studies have indicated the possibility of a product patent making a drug unavailable in a developing nation. This has been shown under the uniform pricing policy adopted by the multinational company (MNC) that produces the drug. Allowing for price discrimination and comparing it with the above situation, we have argued that the problem of non-availability of a patented drug is, indeed, much less serious. However, successful price discrimination is not possible when markets are not perfectly segmented and ‘‘parallel trade’’ (a form of arbitrage) by the distributors exists. Our theoretical model incorporates such a possibility and establishes that even in the presence of parallel trade and cournot competition among the distributors, the MNC can earn higher profits by supplying the drug to both the developed and the developing nations than by confining itself to the markets of developed countries.
Publication from the project in 2010:
“Product Patent, the Problem of Availability of the Patented Drugs and Parallel Trade: A Theoretical Approach” Journal of World Intellectual Property Right (2010) Vol 13, Issue 4 The Journal of World Intellectual Property pages 581–604, co-authored with Meenakshi Rajeev
Under Second Round of Revision:
“The Problem of Availability of Patented Drugs Due to Parallel Trade: A Theoretical Approach”; International Review of Law and Economics, Elsevier Publication.