Being reformed under NAFTA negotiations and in compliance with the TRIPs Argreement

Being reformed under NAFTA negotiations and in compliance with the TRIPs Argreement (Trade Related Intellectual Property Rights) when Mexico joined the World Trade Organization, patent protection for pharmaceuticals in this country has been strictly strengthened since 1991 with the new Industrial Property Law. The aim of this paper is to make a first brief evaluation of the effects carried until now by the introduction of patent protection for pharmaceutical products and to discuss those predicted by the economic literature. While the access to more detailed data could make the analysis richer, some points can be suggested by now. Mainly, the absence of patent protection has not prevented multinationals firms from enter into the Mexican market and ensuring an important market share, -strong brand promotion and product differentiationplaying a stronger role for appropriating returns. The existence of a dual pharmaceutical market (private and public) wherein local firms have traditionally concentrated on the public sector market, retarding thus their commercialisation skills, might have contributed to attenuate the impact of patent reforms on market power exercise by multinational firms. Although the increasing trend on foreign patenting, effective dynamic gains are still far excepting for very few cases of domestic firms investing in incipient development activities. Finally, while direct investment trends would suggest an increased confidence on the patent system and market prospects by foreign firms, to asses the net impact of patent reforms certainly requires a better understanding of both the regulatory and local industrial organization framework as well as a more specific (empirical) evaluation of firms’ answers to strengthened intellectual property protection in developing countries.