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Efficiency trends in the Indian pharmaceutical industry in the new patent regime

Author

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  • Varun Mahajan
  • D.K. Nauriyal
  • S.P. Singh

Abstract

This paper applies data envelopment analysis (DEA) to measure the efficiency of Indian pharmaceutical firms over the period of 2000-01 to 2010-11. The findings reveal that there has been less variation in the mean OTE and PTE scores across years. Further, overall inefficiency in the industry is found to be driven more by managerial inefficiency than the scale inefficiency. The paper identifies efficiency leaders and laggards by applying BCC model. The comparative analysis of efficiency results show that the efficiency scores varied across size, ownership and product-group. On an average, firms in large size, private foreign owned, and engaged in drug formulations have relatively performed better than their counterparts. The paper suggests that in the new patent regime, the possible strategy for the small firms may be to expand their plant size or to merge with large firms in order to improve their performance.

Suggested Citation

  • Varun Mahajan & D.K. Nauriyal & S.P. Singh, 2015. "Efficiency trends in the Indian pharmaceutical industry in the new patent regime," International Journal of Business Performance Management, Inderscience Enterprises Ltd, vol. 16(4), pages 389-406.
    • Handle: RePEc:ids:ijbpma:v:16:y:2015:i:4:p:389-406
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    Cited by:

    1. Varun Mahajan & D. K. Nauriyal & S. P. Singh, 2018. "Efficiency and Its Determinants: Panel Data Evidence from the Indian Pharmaceutical Industry," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 12(1), pages 19-40, February.
    2. Varun Mahajan & D. K. Nauriyal & S. P. Singh, 2020. "Domestic market competitiveness of Indian drug and pharmaceutical industry," Review of Managerial Science, Springer, vol. 14(3), pages 519-559, June.

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