New sources of growth under the TRIPS compliant patent regime for emerging country pharmaceutical industries?: Investigating the development of biosimilar capabilities in the Indian pharmaceutical sector
The impact of TRIPS agreement on the growth and technological capabilities of the Indian and emerging country pharmaceutical industry has emerged as a critical issue in quest for affordable healthcare for poor populations all over the world. Evidence suggests that the initial response of 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 generic markets, aggressive acquisitions by MNCs, regulatory hurdles in advanced country market and failures in managing new drug development has made existing business model redundant, creating significant challenges of growth and survival for the Indian firms. The research presented in this paper suggests that in this new environment some leading Indian firms are now targeting the 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 gradual transition towards 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 capability required for biosimilar product development and market entry forced Indian firms to employ different technology and marketing strategy, revealing clear differences between strategies adopted by firms to develop and target small molecule generic markets and biosimilar markets. This research further highlights the underlying learning process dominating this transition and influence of path dependencies in shaping them. This paper concludes with discussion on implications of these findings to evolution of business models of pharmaceutical firms based in emerging and developing countries.
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13th Globelics International Conference