82 SOCIAL SCIENTIST than its costs. For the literature in support of the Agreement see Chowdhary, N.K. and Aggarwal, J C., 'Dunkel Proposals: The Final Act-1994,' Vol. II, Shipra, Delhi, 1994, pp. 228-65, Debroy, B., 'Beyond the Uruguay Round: The Indian perspective on GATT\ Response Book, New Delhi, 1996, and Debroy, B., Intellectual Property Rights, Ed., B.R. Publishing Corporation, Delhi, 1998; Ganesan, A.V, 'Intellectual Property Rights and the Uruguay Round Negotiations/ in Nair, KRG and Kumar, A., op. cit., p. 116-121; Alikhan, S., The Uruguay Round Agreement: Opportunities and Challenges', in Debroy, B., 1998, op. cit., 'Monthly Commentary' 'Indian Patent Act Agreement Bill,5 Vol. XL(9) April, 1999, p. 60-75 etc. 30. Main features of the policy package are: 1) only process patent for maximum seven years; 2) compulsory licensing after three years; 3) only domestic production is considered as working of a patent. In contrast, under the TRIPS rules product patent is allowed. Compulsory licensing is very-very restrictive and even imports are construed as working of a patent. 31. Informally speaking, price elasticity refers to the sensitivity of the demand of a good to the change in its price. A high price elasticity will reduce the capacity of the right holder to increase the price as even a small increase in price will lead to a drastic decline in sale of the drug. 32. Apart from 250 large pharmaceutical firms and 9,000 registered small scale units producing drugs it is said that there are at least another 22,000 unregistered units. 33. Keayla, 1994, op. cit., puts this proportion as high as 98.80 and 74.4 in case of anti-bacterial and tranquilizer groups respectively. 34. This argument I owe to Dr. Jayati Ghosh. 35. See Debroy 1996, op. cit., Dhar, op. cit.; and Ghosh and Keayla, op. cit. 36. This view is corroborated by number of studies. For discussion Challu P., 'Consequences of Pharmaceutical Product Patenting', World Competition Vol. 15,1991, p. 65-126, also, Wattal, 'Pharmaceutical Patents, Prices and Welfare Losses: Policy options for India under TRIPS Agreement, 2001. 37. See Lanjouw, J.O., 'The Introduction of Pharmaceutical Product Patent in India: Heartless Exploitation of the Poor and suffering?', NBER Working Paper Series, no. 6366, 1998. 38. See Nayyar, D., 1999, op. cit. 39. See Economist, 'Glaxo: coping with unwelcome news,' April 26, 1997. 40. On effects of brand loyalty see Me Rae and Tapan, Some Empirical Evidence on Post Patent Barrier to Entry in Canadian Industry,' Journal of Health Economics, Vol. 4, 1985, p. 43-61. 41. See Nayyar, D., 1999, op. cit. 42. See lossa, E., 'Market Structure, R&D and Advertising in Pharmaceutical Industry,' The Journal of Industrial Economics, Vol. XLVII, No. 2, June, 1999, p. 169-194. 43. See Frontline, Feb., 2000 pp. 44. See lossa, E., op. cit., pp. 169-194. lossa concludes that as innovation and advertisement cost increase the level of concentration for any market size will increase. Further this happens at the cost of small firms. 45. Ibid. The average cost of R&D (including the failed cases) was $54 million in the year 1976 and $231 million in 1987. It went up to $359 million in 1999. Similarly there has been exponential increase in the advertisement cost aswell.821