The Economic Effects on the International Pharmaceutical Industry of the Trade-Related Aspects on Intellectual Property Rights (TRIPS) Agreement on Patent Protection in Indonesia

Abstract

This paper aims to provide further conceptual understanding of the role of IPR, notably in terms of economic effects. It examines the perceived relationship between patent protection (as a key element of IPR) and economic effects from the perspective of leaders and decision-makers (CEOs and other senior managers) in the international pharmaceutical industry located in Indonesia. In reality, it would be virtually impossible for industry leaders to ignore the importance of the TRIPS-agreement and the long-term consequences of having an established legal and regulatory framework protecting intellectual property, for it lies at the heart of the global pharmaceutical industry. In that sense the impact of the TRIPS agreement may be regarded as a catalyst for strategic thinking within the industry and change in Indonesia. The underlying assumption is that industry leaders would naturally regard TRIPS and IPR legislation as an opportunity to increase revenue and profit expectations. In this paper the idea of economic effects widens to include future capital investment, knowledge and technology transfer, along with other economic effects that provide the sustainability for an industry that operates on a long-term basis.