Major Challenges for the Future
Chapter 6: Patent Protection for Pharmaceuticals: The Case of Thailand
It is increasingly recognized that technology is a basic requirement for the industrial growth and economic development of a country. While the acquisition of modern technology in industrialized nations is generally through local R&D, developing countries can acquire technology through two channels: domestic R&D and import of technology from abroad. One of the reasons given for providing pharmaceutical product patents in developing countries is that it will stimulate local R&D and encourage foreign technology owners to transfer technology to the country. This chapter will examine the roles and functions of the patent system in enhancing the acquisition of technology by developing countries. I PHARMACEUTICAL PATENTS AND TECHNOLOGICAL DEVELOPMENT Pharmaceutical companies always argue that the high prices of medicines result from the cost of the investment involved. It is claimed that the pharmaceutical industry is research intensive and requires high economic return to finance continuous R&D activities. The industry also maintains that the investment in the drug discovery is also high risk. Great sums of money may be spent on a product that has no commercial value. The pharmaceutical industry, therefore, demands a high degree of patent protection to guarantee a relatively high return on capital investment (ABPI 1972; PhRMA 2006). While the expenditure on pharmaceutical research comes from different sources, including the public purse, private trusts, or drug companies themselves, internationally the industry maintains that the largest part of R&D investment in the pharmaceutical industry is mainly derived from companies’ profits. They also maintain that...
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