Responding to the rising power “threat”: Pharmaceutical MNEs and the intellectual property “institutional void”

This paper aims to explore how established multinational enterprises (MNEs) have responded to the perceived threat from rising power firms by seeking to alter the intellectual property institutional environment in key emerging economies.

The key place of emerging economies in the efforts of established MNEs to seek patent law change is discussed. Two case studies review developments related to pharmaceutical patents in India and South Africa, highlighting the influence of MNEs in driving policy change and the contested nature of their actions.

While India and South Africa both present evidence of MNEs seeking to influence pharmaceutical patent laws, distinct differences emerge. In India, most MNE pressure has been in response to the emergence of an active domestic industry and a patent law oriented towards generic entry, while the MNE priority in South African has been geared towards maintaining MNE dominance and a system which leads to generous granting of patents.

Managers and decision-makers seeking to invest in emerging economies must take account of a plethora of institutions present, which may be better suited towards local industrial and consumer interests and may prompt resistance to any established MNE-led attempt at institutional change.

The article offers a comparative perspective on pharmaceutical patent laws in India and South Africa, which have been subject to significant contestation by policymakers, civil society organisations and both rising power and established MNEs. The comparison explores and questions the increasingly widespread “institutional void” thesis in international business.