Padmashree Gehl Sampath

Breaking the Fence: Can Patent Rights Deter Biomedical Innovation in ‘Technology Followers’?

Abstract The impact of patent protection on biomedical innovation has been a controversial issue. Although a ‘medical anti-commons’ has been predicted as a result of a proliferation of patents on upstream technologies, evidence to test these concerns is only now emerging. However, most industrial surveys that shed light on this issue are mainly from developed countries, making it very difficult to predict the impact of patenting on biomedical innovation in developing and least developed countries. This paper develops a framework of analysis for the impact of patent rights on biomedical innovation in ‘technology follower’ developing countries. Based on the framework developed in the paper, empirical data collected in an industry-level survey of the Indian pharmaceutical industry between November 2004 and January 2005 is used to analyze the impact of patent rights as recognized under the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement) on biomedical innovation in technology followers.The impact of patent protection on biomedical innovation has been a controversial issue. Although a “medical anti-commons” has been predicted due to a proliferation of patents on upstream technologies, evidence to test these concerns is only now emerging. However, most industrial surveys that shed light on this issue are mainly from developed countries, making it very difficult to predict the impact of patenting on biomedical innovation in developing and least developed countries. This paper develops a framework of analysis for the impact of patent rights on biomedical innovation in “technology follower” developing countries. Based on the framework developed in the paper, empirical data collected in an industry-level survey of the Indian pharmaceutical industry between November 2004 and January 2005 is used to analyze the impact of patent rights as recognized under the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement) on biomedical innovation in technology followers.

The state and innovation policy in late development: evidence from South Africa and Malaysia

This paper analyses the main institutional mechanisms that foster the emergence and performance of firms in knowledge-intensive sectors in developing countries. We use the empirical data collected in 2005 and 2006 in the South African computer hardware and software sectors and the Malaysian computer hardware sector to illustrate the linkages between interactive learning and technological capabilities and how state support plays a critical role in enabling this in the case of knowledge-intensive industries. However, as the analysis in this paper shows, state support is not just implementing a set of policies that succeed elsewhere; it is the ability of the state to set up institutions that reflect a harmony between knowledge and physical infrastructure and the formal and informal institutional compensations that are important to them, and structure the idiosyncratic exchange processes of developing economies.

Comparative Analysis of Innovation Capacity in Latecomer Countries

This chapter re-examines the key findings and perspectives arising out of the country case studies analysed within the sectoral systems of innovation framework that we coded in terms of innovation capacity in latecomer economies. The four country experiences for biotechnology capacity sketch out the complex landscape of both hope and distress for food security and economic development among latecomers. There are several strands of comparison that scholars of innovation and development could decidedly take up ranging from analysing general hindrances to innovation capacity across latecomers, tracing successes and extrapolating their causes, and exploring potential for duplication across the country and elsewhere within other latecomers.

Agricultural Biotechnology Innovation Capacity and Economic Development

This book presents the findings of a multi-year study of the agricultural system of biotechnology across six countries in Asia and Africa. The basic proposition of the study that informs the book was applied across all countries. The key questions were framed to expose what those countries in the catch-up phase require to build and sustain a competitive science and technological infrastructure to deal with the food crisis and to solve the underlying challenge of poverty. The underlying hypothesis of this line of inquiry is that the resolution of the problems of endemic poverty will require — among other development efforts — that countries make long-term sustainable investments not only in science and technological infrastructure but also in developing the right kinds of institution and policy to exploit modern biotechnology. To achieve this, latecomer countries will have to invest in resources for building a complex multidimensional and dynamic range of knowledge, skills, actors, institutions, and policies within specific political policy structures defined as ‘innovation capacity’.

Sectoral Systems for Agricultural Biotechnology

The shift from the previous conception of knowledge production and use as something originating exclusively out of research and development (RD terms that are fully described in subsequent sections.

Vietnam Biotechnology: Building Local Capacity

The development of modern biotechnology in Vietnam can be dated to 1994, when according to a government Resolution 18/CP,1 biotechnology was targeted as one of the country’s sectoral priorities in terms of scientific research for the period of 1995–2010. According to this resolution, biotechnology is considered an essential prerequisite to achieve national goals for food, feed and fiber production, healthcare, and environmental protection.

Kenya’s Incipient Innovation Capacity in Biotechnology

The development of biotechnology in Kenya over the last two decades reflects a steady transition from traditional, low-end biotechnologies such as fermentation, bio-fertilizers, and tissue culture techniques (Odame et al., 2003) towards more sophisticated, modern techniques and applications comprising the use of molecular markers, novel vaccines, diagnostic tools, and genetic engineering.

Malaysia Biotechnology: A Fast Follower

Malaysia is an example of a fast follower in our framework in terms of its general performance and innovation indicators. With a third of its economy still dependent on agriculture and natural resources, Malaysia has recognized that biotechnology will enhance the productivity of the sector while creating new opportunities for the emergence of new industrial sectors such as healthcare and industrial biotechnology. The biotechnology industry is relatively new in Malaysia although food and food additives produced by conventional biotechnology such as fermentation processes and tissue culture (TC) have been in existence for decades in the country. Biotechnology and within that, agricultural biotechnology research and development (R&D) was identified an issue of national interest as early as the 5th Malaysian Plan (1986–90), but it was prioritized as a potential lead sector only in the 8th Malaysia Plan of 2000–5.

Policy Insights and Recommendations

In this short and final chapter, our aim is not to lay out detailed policy recommendations for different contexts and actors but rather to call attention to the broad underlying issues that can be used to frame policy. Evidently, the challenges related to catching up in biotechnology application in order to resolve the food crisis and poverty in those latecomer examined in this book are extremely complex and, sometimes, rather frightening. For instance, as we pointed out in the previous chapter, latecomers hold a mere 3% of all patents worldwide, 80% of these are in the hands of corporations and individuals in the highly industrialized countries and the world’s top five biotechnology firms control over 95% of gene transfer patents.1 Our data shows the evident connection between poverty and hunger: regions and groups that record the least income are the most severely penalized measured by those that suffer the most malnutrition and under-five mortality. These regions and/or groups tend also to be the most land-constrained and to have minimal access to education. The least progress in attaining the MDGs is recorded by the poorest regions of SSA and South Asia. Yet the vicious cycle of poverty equally forecloses the imperative of investment in what is most critical — the immediate need to commit resources to building innovation capacity through investment in scientific and engineering manpower and the construction of laboratory and industrial facilities in order to focus on urgent problems local food supply and disease.

Nigeria as a Very Late Follower in Agricultural Biotechnology

Agriculture has been a major contributor to the Nigeria’s economy, accounting for about 40% of gross domestic product (GDP) and employing about 60% of the work force. However, since 1973 the economy has been highly dependent on the oil sector, which by 2006 accounted for 70–80% of government revenues, over 90% of export earnings, and 25% of GDP, (Central Bank of Nigeria (CBN), 2007). Local agriculture employs more than 90% of the rural population with women playing a major role in the production, processing, and marketing of food crops. Arable land is estimated at more than 70 million ha, of which only 50% is under cultivation. Agricultural land covers a wide range of agro-ecological zones ranging from the semi-arid regions of the northern-most states, the derived savannah land of the middle belt and south-west, to the rainforest belt of south-south and south-east. The total area of inland water bodies is estimated at slightly above 12 million ha. Low-lying and seasonally flooded areas increasingly produce cereals such as rice. Forests and woodlands occupy 17 million ha, but primary forests and most of the wildlife are disappearing.