The Positive Impact of Incremental Innovation on India’s Economy

Aug 26, 2009

The Coalition for Healthy India, sponsored by the U.S.-India Business Council (USIBC) today conducted the Indian launch of its report on "The Value of Incremental Pharmaceutical Innovation: Benefits for Indian Patients and Indian Business". As you may know, currently India’s patent law discriminates against a large portion of valuable pharmaceutical innovation. This report focuses on the impact of restrictive policies in India with respect to medical and pharmaceutical innovation. The study is also intended to add a patient-centric perspective to the public discourse on intellectual property rights and highlights the positive impact that incremental innovation can have on patient care in India.

The report suggests that the offending section of India's patent law (Section 3(d)) should be changed in order to benefit Indian companies and Indian patients. Many studies have concluded that patent protection for incremental innovation enhances further investments in research and development.

The report notes that in India in the early 1990’s, pharmaceutical R&D rose from 0.4% to as much as 4.8% by 2004. Yet by 2006, when India began to allow patents on pharmaceutical products, India’s three largest drug firms were investing between 12-18% of their annual sales in research and development. Extending patent protection to incremental innovation encouraged further investment which has led to new drugs in both the Indian and global markets.

Incremental pharmaceutical innovation benefits Indian patients and leads to a higher quality of life, just as it has across the world. In recent years, pharmaceutical innovation has accounted for as much as 65% of new drug approvals by regulatory agencies, and over 60% of the drugs on the World Health Organization list of essential medicines reflect incremental innovation of older drugs.

This report further solidifies the importance of incremental pharmaceutical innovation and empowers efforts to help amend India’s current patent law.

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