INTRODUCING PATENT PROTECTION IN THE PHARMACEUTICAL SECTOR: A FIRST EVALUATION OF THE MEXICAN CASE

Abstract

Reformed under NAFTA negotiations and in compliance with the TRIPs Agreement (Trade Related Intellectual Property Rights) when Mexico joined the World Trade Organization, patent protection for pharmaceuticals in this country has been reinforced since 1991 with the new Industrial Property Law. The aim of this paper is to make a first brief evaluation of the static and dynamic effects of the introduction of patent protection for pharmaceuticals in Mexico and to compare them to those predicted by economic literature. Regarding localization and market power, the absence of patent protection has not prevented multinationals firms from breaking into the Mexican market and ensuring an important market share. Brand promotion and product differentiation seem to have been the main tools to practice market exclusivity. Although the static effects might have been limited since multinationals already controlled the private market before the reforms, dynamic gains are still far from being felt. They suggest that other factors besides patent protection must be taken into account before expecting an increased R&D activity in the Mexican pharmaceutical sector.