"Implications of Product Patents – Lessons from Japan"

Reiko Aoki, Hitotsubashi University and Tomoko Saiki, Tokyo Institute of Technology (Japan)

Product (material) patents were introduced to Japan in 1976. The study examines data prior to 1976 and years immediately following to determine the law’s effect on domestic pharmaceutical market, innovation by pharmaceutical firms, and relationship of the Japanese market to the rest of the world. There is evidence that the domestic market became more concentrated and quality of pharmaceutical innovation changed after the introduction. This is because introduction of product patents is different from simple strengthening of existing technology protection such as increasing breadth. We identify possible consequences of the introduction of the product patents in Japan in 1976. The study looks at changes that occurred in the domestic pharmaceutical market, innovation and changes in the context of the international pharmaceutical market.