ECONOMIC GROWTH CENTER

                         YALE UNIVERSITY

                          P.O. Box 208269
                        27 Hillhouse Avenue
                      New Haven, CT 06520-8269


                  CENTER DISCUSSION PAPER NO. 775




                  THE INTRODUCTION OF PHARMACEUTICAL
                        PRODUCT PATENTS IN INDIA:
           "HEARTLESS EXPLOITATION OF THE POOR AND SUFFERING"?





                            Jean O. Lanjouw

                            Yale University







                              August 1997






Note: Center Discussion Papers are preliminary materials circulated to
      stimulate discussions and critical comments.





                                 Abstract



    The decision to require that countries grant product patents for
pharmaceutical innovations as a condition of membership in the World Trade
Organization was very contentious.  Almost fifty developing countries were not
granting patent monopolies for drugs during the period the Uruguay round of
GATT was being debated and these countries fiercely resisted the inclusion of
this requirement, claiming that vastly higher drug prices would be associated
with such patents.  On the other side, business interests in the West urged
them to consider the beneficial effects such protection might bring both in
terms of focusing more research on tropical diseases and encouraging greater
domestic and foreign investment in local research activities.  This paper
discusses the various theoretical implications for a developing country of
introducing product patents for pharmaceuticals.  Using India as an example,
it then brings together information gathered from both published sources and
personal interviews to examine the potential magitude of these effects.  While
not arriving at a conclusive answer to the question posed in the title, there
are some suggestions about the way events might unfold as the policy is
implemented.