Rise of India's Drug Industry

Critics have pointed a finger at the unethical use of intellectual property in the pharmaceutical industry claiming it is being used to set prices far above what those in third world countries can afford. Given that a good number of the raw material came from these regions, it is unethical to use intellectual property

The case consists of two major pharmaceutical companies that joint to collaborate their research and pharmaceutical technologies to start a joint venture in India. Both have valuable resources that have benefited both companies during the joint venture. Now both are questioning if there is still any value in maintaining the joint venture in India and will be deciding what will be the best route to take. Ranbaxy Laboratories wants to be bought out, but Eli Lilly is worried of the financial implications of such move.

Economic: Globalization of the pharmaceutical industry is an exciting opportunity to have research and development done at cheaper prices in other countries. However, this could be a double edged sword for companies because it is easy for other countries, such as India, to produce generic versions of the drug in bulk.

Expanding into Asia (including India) so as to implement lower cost clinical testing and share opinions with leaders in the medical industry appeared to be a viable option. Drug prices however were substantially lower in India, profits were capped at 6% and post manufacturing costs were limited at 100%.

Whether eastern-based medicine or western medicine, there is a multitude of so-called healing modalities. A plethora of industries is available to get their share of the huge financial pie. The pharmaceutical industry is one of the

Even though the pharmaceutical industry had been highly profitable and contributed about 40% OF Ciba-Geigy’s revenues in profit, there were some trends, which were worrying. The government had attempted to reduce a cost of healthcare thus; pressure to lower costs was mounting on industrialized countries. There were restrictions to introduce new products, and price control became stricter while limiting the freedom of doctors to prescribe medications. Patent controls were becoming reduced, and the pharmaceutical industry was becoming increasingly criticized. These trends later made the industry to

This casebook concentrates on the negative effects that the pharmaceutical industry’s trade and production policies have on third world nations suffering from disease epidemics. My position is that pharmaceutical companies are not concerned with the health benefits of their drugs, but rather with the market that their drugs generate. I illustrate this notion by describing the trade policies that pharmaceutical companies influence and the pharmaceutical companies’ production policies which concentrate on producing life-style drugs rather than drugs that cure life-threatening diseases.

There are advantages of starting a pharmaceutical firm in India. It has emerged from being an enzyme-producing firm to a biotech powerhouse under the guidance of Ms Kiran M. Shaw. They have a well-established pharmaceutical industry that has been growing since 1947. After the purchase of Hindustan Antibiotics Ltd. and India Drug and Pharmaceuticals Ltd. they were able to compete with the MNC’s (Multi National Corporaton) from overseas (Kalegaonkar, Locke, Lehrich, 2008, p. 2). In the beginning the pharmaceutical industry saw substantial growth. “By the beginning of the 21st century, over 20,000 pharmaceutical companies were operating in India” (Kalegaonkar, Locke, Lehrich, 2008, p. 2). “The pharmaceutical industry in India is ranked third

By 2020 the pharmaceutical market is anticipated to more than double to US$1.3 trillion, with the E7 countries — Brazil, China, India, Indonesia, Mexico, Russia and Turkey — accounting around for one fifth of global pharmaceutical sales. Further, incidence of chronic conditions in the developing world will increasingly resemble those of the developed world.

We analyzed the Indian Pharmaceutical industry on these five forces and the findings of industry competitiveness and profitability are written under the relevant competitive forces.

The pharmaceutical industry has shown remarkable structural stability as majority of its key players have been in existence for almost a century now. However, it has not been an exception to unpredictable times of the 21st century as it is grappling with quite a number of challenges. The most urgent issues include termination of manufacturers’ rights, importation risks, pricing problems and the infiltration of counterfeit drugs, the cost of R&D and political and administrative constraints notwithstanding. Most of these challenges have existed over a long period and the rate at which they are escalating presents a big threat to the industry.

For as long as civilization has existed, humans have been looking for ways to advance in the field of medicine in order to cure illness and elongate the human lifespan. This has led to many positives such as ground-breaking new discoveries, inventions, and vaccines. One aspect of medicine that has grown dramatically in the past decade is the pharmaceutical industry. The pharmaceuticals are responsible for the manufacturing and the distributing of medicine in the form of drugs. While the drugs main purpose is to help the sick, you cannot say the same for the pharmaceutical industry. Unfortunately, the pharmaceuticals discovered that the more we advance in the field of medicine, the more money there is for the taking. The World Health

Therefore, protection of patents is one of the key conditions necessary for further development of the pharmaceutical industry. At the same time, non-efficient legislation that does not provide the necessary level of patent protection is one of the factors that hamper expansion of “Big Pharmaceutical” companies to the developing countries8.

The concept of product patent for pharmaceutical products is likely to make life saving medicine beyond the reach of the poor and deprived section of the society around the world.

Pharmaceuticals have gradually evolved from an import-based industry to a self-manufacturing one exporting to 70 countries with a market size of over $750 million. Foreign investments either in the form of joint ventures with Bangladeshi companies or other partnerships whereby research and development is run in laboratories in India with complementing manufacturing plants in Bangladesh should be welcomed. These companies could utilize the competitively priced labor in Bangladesh and use cost advantages to capture the export market.