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Cross-roads for Pharma in India

Kale, D  

February 2011   (Posted February 2011)

Over the past 50 years, the Indian pharmaceutical industry has gone from being copycat followers to partners of choice for multinational companies in their drug discovery research and development efforts. A shift toward weak regulatory policy in the 1970s and a protected market encouraged the growth of an industry which has emerged as a key supplier of cheap and affordable drugs to the needs of low-income users in developing countries. Since the 1990s, Indian regulatory and market environment has changed remarkably.

Strengthening of regulatory regime due to the Trade Related Intellectual Property Agreement (TRIPS) in 1995 forced Indian firms to change their business strategies towards focussing on the generics market in Europe and the USA, investing in innovative R&D and targeting contract manufacturing market. Indian firms started hiring Indian scientists working in multinational pharma companies (MNC) firms to fill knowledge gaps in innovative R&D and adopted overseas acquisition strategy to acquire knowledge regarding markets, technology and regulatory skills. The value of the Indian pharmaceutical industry’s overseas acquisition has grown from just US $8 million in 1997 to $116 million in 2004. Geographically the overseas acquisition by Indian pharmaceutical firms continues to be directed at companies in advanced markets specifically the US and Europe.