The impact of General Agreement on Tariffs and Trade on the pharmaceutical sector in the Third World

Over the past decade, the industrialized nations of the world have demanded the enforcement of intellectual property laws across all fields. A number of treaties and other trade agreements have been created to implement universal intellectual property laws. The General Agreement on Tariffs and Trade (GATT) has created the Trade-related Intellectual Property Rights (TRIPs) agenda. All third world countries signatory to GATT will within a period of ten years be required to implement patent protection based on requirements made clear under TRIPs. In order to determine the impact of patent laws in the future it was necessary to understand their impact in the past. This study was carried out to determine the impact of pharmaceutical patent laws on the growth of pharmaceutical sectors in the third world. The period of the study was 1970-1992. The study sample was comprised of nine third world and seven first world countries. Third World countries were chosen on the basis of their patent laws. The data were comprised of Standard International Trade Classification (SITC) 541: Medicinal and Pharmaceutical Products. It was obtained from the United Nations Center on Trade and Development (UNCTAD). The factors studied to determine strength of the pharmaceutical sector in third world countries included import and export of bulk pharmaceuticals, import and export of medicaments (finished goods), trading partners, and a positive balance of pharmaceutical trade. It was concluded that the growth of pharmaceutical sectors in the third world cannot be completely explained by the presence or lack of patent laws. Further research is needed to make clear the role of other policy areas such as corporate laws which may complement the role of patents in the growth of the pharmaceutical sector in the third world.