Kuanpoth, Jakkrit, 2007, Intellectual property rights and pharmaceuticals: a Thai perspective on prices and technological capability, Thammasat Economic Journal, 25(4), 1-47.
The justifications in favour of pharmaceutical patenting in developing countries are that it induces foreign direct investment (FDI); it stimulates local inventive activities; it encourages transfer of new technologies into the country. The paper examines whether intellectual property protection on pharmaceuticals generates benefits to developing countries by looking at the situation in Thailand. It finds that Thailand does not have a functional technological base and this makes the country industrially and technologically dependent on foreign interests. It consistently loses trade balance in the pharmaceutical sector to its trading partners. It is also evident that a stringent patent regime has no impact whatsoever in promotion of the country’s inventive activities, but hinders local R&D and impede inflow of technology. Patents are used by foreign drug companies as a mechanism for overpricing, transfer pricing and insertion of restrictive clauses in technology transfer agreements.