A patent makes the right to produce, use or sell an invention in a specific country exclusive to its holder. In the EU and US, it is valid for 20 years after being granted. This encourages innovation by drug companies as it helps ensure that they can pay off research and development costs from the drug. Where the patent applies, they have a monopoly on the drug and so can set higher prices. Patents can also be bought from the developing company. Only after a patent has expired can competitors produce identical (‘generic’) versions of the drug at lower prices. As less strict drug patent regulation is present in India, it is a significant producer of ‘generic’ drugs even while the patent is valid in the holding country allowing cheaper drugs to be sold there and in many developing countries.