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Global Competitiveness of Indian Pharmaceutical Industry: Trends and Strategies

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  • Pradhan, Jaya Prakash

Abstract

What are the trends in the global competitiveness of the Indian pharmaceutical industry? Where does this industry stand when compared to global peers on pharmaceutical value-added, productivity, research and development and trade performance? What are the new strategies that Indian pharmaceutical companies are adopting to become global players? These questions are addressed in this paper. It is found that strategic government policies were the main factors that transformed the status of the Indian pharmaceutical industry from a mere importer and distributor of drugs and pharmaceuticals to an innovation-driven cost-effective producer of quality drugs. India emerged as one of the fast growing pharmaceutical industry in the world with growing trade surpluses and exports. However, there are certain limitations that the government policies need to address, like low productivity and R&D intensity. A host of competitive strategies, like greenfield direct investment, overseas acquisitions, strategic alliances and contract manufacturing have emerged as favourites to Indian pharmaceutical firms recently.

Suggested Citation

  • Pradhan, Jaya Prakash, 2006. "Global Competitiveness of Indian Pharmaceutical Industry: Trends and Strategies," MPRA Paper 12340, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:12340
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    References listed on IDEAS

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    1. Lanjouw, J.O., 1997. "The Introduction of Pharmaceutical Product Patents in India: "Heartless Exploitation of the Poor and Suffering"?," Papers 775, Yale - Economic Growth Center.
    2. Fagerberg, Jan, 1987. "A technology gap approach to why growth rates differ," Research Policy, Elsevier, vol. 16(2-4), pages 87-99, August.
    3. Pradhan, Jaya Prakash, 2003. "Liberalization, Firm Size and R&D performance: A Firm Level Study of Indian Pharmaceutical Industry," MPRA Paper 17079, University Library of Munich, Germany.
    4. Fink, Carsten, 2000. "How stronger patent protection in India might affect the behavior of transnational pharaceutical industries," Policy Research Working Paper Series 2352, The World Bank.
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    Citations

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    Cited by:

    1. Pradhan, Jaya Prakash, 2007. "New Policy Regime and Small Pharmaceutical Firms in India," MPRA Paper 12335, University Library of Munich, Germany.
    2. Balcet Giovanni & Bruschieri Silvia, 2009. "Indian multinationals in the automotive and the pharmaceutical sectors: competitive advantages and strategies," Department of Economics and Statistics Cognetti de Martiis. Working Papers 200906, University of Turin.
    3. Jaya Prakash Pradhan & Abhinav Alakshendra, "undated". "Overseas Acquisition Versus Greenfield Foreign Investment: Which Internationalization Strategy is better for Indian Pharmaceutical Enterprises?," Working Papers 0607, Institute for Studies in Industrial Development (ISID).
    4. Jaya Prakash Pradhan, 2010. "Strategic Asset-Seeking Activities of Emerging Multinationals: Perspectives of Foreign Acquisitions by Indian Pharmaceutical MNEs," Organizations and Markets in Emerging Economies, Faculty of Economics, Vilnius University, vol. 1(2).

    More about this item

    Keywords

    Indian Pharmaceutical Industry; Productivity; Innovation; Trade; Strategic Alliances; Foreign Investment; M&As;

    JEL classification:

    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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