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The purpose of this paper is to empirically study the impact of product patent regime on the productivity of different categories such as ownership, R&D, size and product-wise of Indian pharmaceutical firms using non-parametric data envelopment analysis.

The present study has applied Ray and Desli’s Malmquist productivity index and its decomposition to measure total factor productivity (TFP) change, pure technical efficiency change, scale efficiency change and technical change under variable returns to scale (VRS) technology assumption for 141 Indian pharmaceutical firms during 2000-2001 to 2014-2015.

The study found the negligible impact of product patent regime on productivity. The technological change has played a positive role in the growth of productivity, whereas technical efficiency change depicts the judicious utilization of resources for improving performance. From the results, it is found that R&D intensive firms depict better stability in the TFP than the non-R&D firms. However, Granger causality between R&D and productivity found no relationship. Productivity is more directly affected by investment in fixed assets rather than in R&D, which focusses on incremental value additions in a largely branded/plain generic product market. In case of ownership, private foreign firms found to have registered progress in TFP while others have recorded marginal regress, which probably could be attributed to the superior marketing and management skills of the foreign firms, besides possessing proprietary technology. Both small and large firms have shown positive growth in the new regime as compared to the pre-patent regime. These small firms are able to compete with large firms because of their up-gradation of the technological base by improving access to better foreign technology. TFP growth for all the firms can be attributed to improvement in technology, and innovation in terms of high capital-output ratio. Further, the paper tried to identify the determinants of productivity from panel random effect regression, and it is found that export intensity, age and the new patent regime have negative and significant relationship with productivity, whereas other variables such as R&D, ownership, size and capital imports are insignificant. In the end, the results of sensitivity analysis have confirmed the validity of the selected variables.

The results suggest that Indian pharmaceutical firms need substantive improvement in TFP by improving managerial and scale efficiency. Indian pharmaceutical industry (IPI) needs to improve productivity across the network and drive cost excellence initiatives across the spend base through operational excellence and digital initiatives. The results of this paper can be applied in framing policies for future growth and improvement in the productivity of IPI.

The paper aims to make several new contributions to the existing literature. Most of the research papers only analysed TFP of the industry as a whole and detailed firm-wise analysis is needed to capture the true impact at a unit level. This study has analysed the impact of different categories such as ownership, R&D, size and product-wise, and determinants of productivity. The study has used a broader time period and larger panel data to predict the better picture.

The purpose of this paper is to examine the extent to which developing countries could build national initiatives of compulsory licences.

The focus of this article is only on developing countries. The author reflects on the Indian patent jurisprudence regarding the operational relationship between the general principles applicable to working of patented inventions locally and the grant of compulsory licences. The discussion that follows is based on a review of the case: Bayer Corporation versus Natco Pharma with a view to presenting a model for developing countries to maintain that the public interest principle of patent law is well-founded in their domestic patent regimes.

The analysis confirms that failure to work locally continues to be abusive of the patent right under the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, and remains a valid condition on which to grant a compulsory licence. Thus, this reverses the often-contrary misconception that has become almost a unanimous assumption that failure to work basis for granting compulsory licensing would violate Article 27(1) of TRIPS and its enforcement provisions on patent.

The author argues that as no member state has challenged the legality of Indian’s decision in the World Trade Organisation, under the dispute settlement understanding (DSU) system is more supportive of the contention that failure to work locally continues to be permissible under TRIPS and remains valid conditions on which member states can grant compulsory licences. This further adds weight to the understanding that nothing in the light of TRIPS would, in fact, preclude any possibility of developing countries amending their patent laws accordingly to maintain that the public interest principle underlining patent law is well-founded in their domestic patent regimes.

This paper aims to present structural changes and trade competitiveness in Indian pharmaceutical industry in pre and post product patent regime. The study shows the impact of product patent on market structure, ownership, trade, revealed comparative advantage, R&D and mergers and acquisitions.

The study is based on secondary data and extensive relevant conceptual and empirical literature review.

The study finds that this oligopoly Indian dominant pharmaceutical industry has many challenges ahead such as in R&D expenditure, patent expiration of many major drugs manufactured in Ireland, growing competition in generic global market, bulk drugs dependence on China, rise in the number of M&As, rising costs of new drug discovery and tightening safety and efficacy testing requirements. The smaller firms are likely to act as the contract manufacturers for medium and bigger companies at a lower value chain. The Normalised Revealed Comparative Advantage (NRCA) index was calculated for top exporters of pharmaceutical. It was found that NRCA index of IPI has shown deterioration from 1996 to 2005 and thereafter, improvement except in the year 2009. Switzerland, Belgium and Ireland are the top three countries in NRCA index, which are followed by Germany, the UK and France.

It attempts to capture recent trends in market structure, comparative advantage indices, R&D, trade, M&A and ownership, especially in new IPR regime. There is a dearth of studies providing detailed analyses of India’s comparative advantage vis-a-vis other leading exporters of pharmaceutical products in the world. The paper would be of value to practitioners and scholars interested in structural changes of IPI, especially in product patent regime. The findings have significant implications for managers and government for future policymaking.

This research investigates the top five pharmaceutical companies in India to determine whether their financial structures are sound and if they face the risk of bankruptcy, highlighting the potential contribution of intellectual capital (IC) to financial stability.

The analysis outlines operating ratios, profitability ratios, possibility of bankruptcy (through Z-scores) and attractiveness of the financial structure (through the F-score), with consequent focus on (IC).

The financial structure of the selected companies seems stable. Changes in the Indian pharmaceutical scenario, above all, regarding the patent system, will force the companies to consider the impact of IC carefully.

Indian pharmaceutical companies need sustainability and development, with increasing focus on patent issues. To enhance innovation capabilities and overcome international competition, they should redesign their business orientation towards IC, mainly when impacting patents.

Using established approaches for predicting potential bankruptcy, this study focuses on the financial performance of top Indian pharmaceutical companies. IC can support financial stability, and this study provides further perspectives for managing their financial structure, both statically and dynamically.

The Indian pharmaceutical industry accounts for 8% of global production and exports medicines to over 200 countries. Multinational enterprises (MNEs) enter the Indian market either directly through the establishment of subsidiaries or indirectly through licensing arrangements. However, evidence on MNE’s contribution toward development in India in terms of capability enhancement and linkages or through other spillover effects is limited. The purpose of this research was to generate evidence on (a) contribution of MNEs in the pharmaceutical market in India, (b) nature and impact of foreign direct investment (FDI) inflows in the Indian pharmaceutical sector, (c) contribution of MNEs in R&D and innovation in India, and (d) MNE’s contribution toward introducing new chemical entities (NCEs) and new biological entities (NBEs) in India through a mixed method research design. We conducted an in-depth quantitative analysis on multiple data sets and qualitative interviews of various stakeholders to generate a holistic understanding on the aforementioned research objectives. Our findings suggest that from the perspective of capability enhancement and linkages, the contribution of pharmaceutical MNEs in India is limited. We observed that majority of FDI investments are brownfield against desired greenfield investments. In addition, MNEs are investing far less of profit before tax (PBT) compared with Indian firms on research and development. However, MNEs are contributing significantly toward access to certain pharmaceutical segments like vaccines, hormones, and parenterals, which require sophisticated production facilities, advanced technology, and intellectual capital. Further, MNEs role in innovation and introduction of new medicines (new molecular entity [NME] and NBE New Chemical and Biological Entities (NCEs and NBEs)) in India is significant. We propose that creating a conducive policy environment and predictable regulatory environment can facilitate capability enhancement and linkages through MNEs. Some of the potential policy instruments include appropriate implementation of FDI policy and Intellectual Property Rights (IPR) policy to balance trade and public health.

The purpose of this paper, focusing mainly on India – and a lesser extent on China – is to examine, broadly, two related issues concerning the rise of pharmaceutical industry in the emerging economies: the strategic response of the emerging‐country pharmaceutical firms to the new patent regime that recognizes and enforces product patents; and its implications for multinational enterprise (MNE) strategies.

The paper is based on extensive review of the relevant conceptual and empirical literature and secondary data.

The strategic response of pharmaceutical firms in the emerging economies (India and China, for example,) to the new patent regime is to develop multiple competencies and position themselves to simultaneously compete and collaborate globally with the MNEs – large firms rapidly moving towards discovery and development of new drugs, and medium and small firms engaged in the production of off‐patent generics and contract manufacturing, respectively.

The trend towards greater collaboration between the emerging‐country firms and the MNEs in the new patent regime raises serious concern about prescription drug prices in the developing as well as developed countries. Given the importance of the pharma industry to the health of nations, firms in rich and poor countries alike will continue to come under public pressure to develop and market the needed drugs at affordable prices.

The paper would be of value to practitioners and scholars interested in the implications – for MNE pricing, outsourcing and R&D strategies, for example – of the rapid rise of pharmaceutical industry in the developing countries such as India and China.

This chapter examines the impact of changes in foreign exchange legislation on the levels of R&D undertaken by pharmaceutical firms in India. Foreign exchange legislation in India was codified as the FERA, passed in 1973, and the legislation was based on the mens rea principle, assuming criminal intent on the part of transgressor. The provisions of FERA were replaced with those of new legislation, called FEMA, in 1999. The impacts of the changes have been examined.

The examination has been based on panel data of Indian pharmaceutical firms over a period of fifteen years, from 1991–1992 to 2005–2006.

The results of the analysis have shown that, controlling for a variety of other factors, a transition from FERA to FEMA has been associated with a significant rise in pharmaceutical firms’ average levels of R&D undertaken.

The research establishes that institutional changes have significantly impacted innovation performance in India. The sector examined, pharmaceuticals, is important for the Indian economy as well as for general welfare, since its products help enhance the quality of lives. How innovation can be enhanced in this sector is an important policy consideration.

The research is the first to examine the impact of changing the laws relating to foreign exchange transactions in India on capability building, via undertaking research activities, in an important sector of Indian industry.

The purpose of this paper is to examine the trade performance, revealed comparative advantage and trade specialisation indices of Indian pharmaceutical in the post-modified Indian Patent Act.

The main data sources for this paper are United Nations Conference on Trade and Development, PROWESS of Centre for Monitoring Indian Economy, Government of India reports and Reserve Bank of India databases. Revealed comparative advantage index (RCAI) and trade specialisation coefficient (TSC) have been calculated in the study.

India is ranked third in regard of TCS, far behind Ireland and Israel. While Ireland has moved up the value chain faster after 1995, Israel has moved up swiftly after 2000 through global production network and supply chain. The Indian pharmaceutical industry, on the other hand, has largely capitalised on its low-cost production of generic drugs and a large domestic market. The RCAI also supports the results of TSC. India is positioned at 11th place, far behind Ireland, which stands tall at the top with distantly followed by Israel, Switzerland, Belgium, the UK, etc.

The study shows the policy implications for future sustainable development of the industry as the new IPR regime has given opportunities as well as threats to both domestic pharmaceutical companies as well as the multinational corporations. The Indian pharmaceutical industry can be a good learning experience for other developing countries hopeful to enter the global market for generic drugs.

There are no major studies providing detailed analyses of India’s comparative advantage vis-à-vis other leading exporters of pharmaceutical products in the world. This study endeavours to fill this gap. It also attempts to capture recent trends in exports and imports during the global recession period.

This paper aims to analyze the firm level determinants of profitability of Indian drug and pharmaceutical industry which is known for historically weak R&D initiatives.

The change in the economic environment brought out by the Trade-Related Intellectual Property Rights (TRIPS) compliance, this industry was found to have fast adjusted to a new working environment by substantially modifying its strategies. This study aims at using inflation-adjusted panel data for a period 2000-2013 and applies the fixed effects regression model with cluster standard errors.

The study has found that export intensity, A&M intensity, firm’s market power and stronger patent regime dummy have exercised positive influence on profitability. The negative and statistically significant influence of R&D intensity and raw material import intensity points to the need for firms to adopt suitable investment strategies.

The study suggests that firms are required to pay far more attention to optimize their operating expenditures, advertisement and marketing expenditures and improve their export orientation, as part of the long-term strategy.

This study uses a recent data-set to analyze the firm level profitability determinants in the Indian pharmaceutical industry and captures the effect of change in profitability pre and post-TRIPS.

This paper aims to examine the impact of the intangible intensity of the firm on the relevance of research and development (R&D) information to determine equity values in India. Additionally, the study compares the association of input information on R&D investment (the reported R&D cost) and output information on R&D investment (patent count) with equity values. Further, the study also examines the operational nature of the firm and patent count, which is the better proxy to measure the intangible intensity of the firm.

The authors compared the explanatory power of R&D information between intangible and non-intangible intensive firms. To estimate the value relevance of R&D information, the authors followed the statistical model based on the theoretical framework of the residual income model.

The results indicate that there is a significant moderating impact of the intangible intensity of the firm on the relevance of R&D information to determine equity values in India over the 25 years study period (from 1991 to 2016). Further, in India, the study finds that the input information of R&D outlay is more relevant than output information on R&D outlay to determine equity values, irrespective of the proxy measure of intangible intensity. Moreover, the study finds that the operational nature of the firm is a better proxy of the intangible intensity of the firm compared to patent counts.

In this study, pooled cross-sectional data were used for analysis. In the future, longitudinal and panel data can be used for more insightful results.

The findings of the study provide direction to investors and creditors to find the intrinsic value of the investments in internally developed intangible assets, which will reduce the asymmetry between the market value and accounting value of equity.

The paper offers insights into the impact of intangible intensity on the relevance quality of R&D information in an emerging country.