Agreement on trade-related aspects of intellectual property and the pharmaceutical industry: An empirical study

Purpose- This paper is an attempt to know the relation between legal background and the performance of the Indian Pharmaceutical Industry. The scenario changed when the 'Patent Act- 1970' was enacted in India. This Act allowed process patent in medicines. Reaping the benefits of this Act Indian pharmaceutical companies made tremendous progress and became the world leader in generics and many other areas. However India has to reintroduce the product patent in India to comply with the TRIPS agreement. The study is conducted to be acquainted with the functioning of the Indian pharmaceutical industry in the changed legal scenario. Design/Methodology- Secondary data on various financial parameters has been taken from the balance sheet of five leading Indian pharmaceutical companies. Data of 11 financial years has been used in this study to know the performance of the company in PRE TRIPS period and POST TRIPS period. Hypotheses have been formulated and are tested by ANOVA technique. Findings- The paper provides information vis-À-vis performance of Indian pharmaceutical industry in both PRE and POST TRIPS period. The results indicate that the performance of the Indian pharmaceutical companies in the post TRIPS period has remained fairly good and they are likely to grow further. Practical Implications-The result of the study is useful for all professionals who are working the pharmaceutical sector and deal with intellectual property rights. Originality- Infinitesimally small work has been done in the interdisciplinary area of legal environment and the performance of the Indian pharmaceutical industry. This paper fulfills the need of all professional who require in-depth knowledge in this domain.