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Evolution of creative imitation under the TRIPS compliant patent regime: Development of biosimilar capabilities in the Indian pharmaceutical sector

Kale, D   Huzair, F

Atlanta Conference on Science and Innovation Policy

Atlanta, GA, USA

Conference website: http://www.atlantaconference.org/

September 17 – 19 2015

The impact of The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) on the growth and technological capabilities of the Indian pharmaceutical industry and indeed the pharmaceutical industry of other emerging countries has emerged as a critical issue in the quest for affordable healthcare for poor populations. Evidence suggests that the initial response of the Indian pharmaceutical industry to the TRIPS challenge was based on exploiting superior process R&D capabilities and targeting small molecules generic markets in advanced countries. However, in the last decade the decline in traditional generics markets, aggressive acquisitions by multinational corporations (MNCs), regulatory hurdles in advanced country markets and failures in managing new drug development has made the existing business model redundant, creating significant challenges for the growth and survival of Indian firms.

The research presented in this paper suggests that in this new environment some leading Indian firms are now targeting a new set of opportunities presented by the emergent biosimilar segment in the global generics market as a new source of growth. Some Indian firms have made a gradual transition towards the development of biosimilar capabilities and using case studies of three Indian firms, this paper argues that this transition represents a next phase of creative evolution for the Indian pharmaceutical industry. The different set of capabilities required for biosimilar product development and market entry have forced Indian firms to employ innovative technologies and marketing strategies, revealing clear differences between the strategies adopted by firms to develop and target small molecule generics markets and biosimilar markets.

This research further highlights the underlying learning processes dominating this transition and the influence of path dependencies in shaping them.

This paper concludes with a discussion on the implications of these findings to the evolution of business models of pharmaceutical firms based in emerging and developing countries.

The PDF version of the paper presented is available for download here.