Policy, Markets and Knowledge: Strategic Synergies in Indian Pharmaceutical Firms

This paper addresses the question of how Indian pharmaceutical firms have transformed themselves from reverse-engineering firms focused on the domestic market to research-driven firms with global presence. It analyses the crucial and changing role of national, then international, innovation and regulatory policies and their impact on growth, performance and technology evolution of Indian pharmaceutical firms. The paper argues that although public policy increased market turbulence, it also provided new opportunities for firms to expand and build new technology, knowledge and market capabilities. From the 1950s Indian firms have pursued a variety of research, marketing and internationalization strategies to tackle changes prompted by policy, markets and knowledge complexities. The paper traces firm strategies that vary both in time and by firm, and argues that the successful firms have evolved substantively towards knowledge-based strategies. The paper then attempts to identify future directions for strategy, knowledge and markets.     

From Imitation to Innovation: The Evolution of R&D Capabilities and Learning Processes in the Indian Pharmaceutical Industry

Since the mid 1990s the Indian pharmaceutical industry has emerged as a leading supplier of generic drugs to both developing and developed countries.The movement of the Indian pharmaceutical industry along the R&D value chain represents a remarkable shift from an importer to an innovator of drugs. The Indian government's industrial and technology policies along with changes in regulation of intellectual property rights played a crucial role in shaping this development of R&D capability. Using the 'capability creation model' this paper discusses the learning processes and stages involved in this dramatic accumulation of technological capability. This analysis shows that the Indian pharmaceutical industry has followed a trajectory from duplicative imitation to creative imitation to move up the value chain of pharmaceutical R&D. Finally as a result of changes in patent law the industry is learning to develop capabilities in innovative R&D. The basic and intermediate technological capabilities gained from imitative learning gave these firms a solid base for development of competence in advanced innovative R&D. These findings have implications for government policies as well as firm strategies in other developing countries albeit with some limitations due to global harmonisation of patent laws being promoted by the World Trade Organization.     

The effects of patent-law changes on innovation: The case of India's pharmaceutical industry

Recent patent-law changes in India's pharmaceutical industry provide opportunities to study changes of institutional and regulatory environments on innovation and social welfare in low-income markets. From 1972 to 2004 under its process-patent regime, India's pharmaceutical industry grew to become the world's fourth largest. Indian companies were becoming globally competitive in generics and clinical testing, and moving into product R&D. Researchers have debated the effects of India's new product-patent laws' effects on these trends. The authors cover the domestic characteristics and global competitiveness of India's pharmaceutical industry. They contrast data (from 2001 to 2004) on patents in India's process-patent regime with preliminary data (from 2005 to 2008) on patents in the country's new product-patent regime. They argue that Indian pharmaceutical companies have changed their decision-making in response to changed patent laws by moving from process to product research. However, the preliminary results indicate that these changes may have hurt domestic innovation. They conclude with strategic implications for the Indian pharmaceutical industry and highlight the need for research and public policy to establish optimal social returns from product-patent regimes.     

From the 'rhetoric of hope' to the 'patient-active paradigm'—strategic positioning of pharmaceutical and biotechnology companies

In this paper overt repositioning of pharmaceutical and biotechnology companies in relation to patients and the wider public between 1990 and 2002 is analysed. It is proposed that this repositioning is linked to their success in gaining public acceptance of their use of genetics-based technologies to develop novel products. It is argued that this has helped biopharmaceutical companies to avoid the public stigmatisation that agrochemical companies incurred when they employed the same technologies to develop GM Crops. Implications are drawn for the ability of established and of new firms exploiting emerging technologies to position themselves strategically in the future in an arena that is ethically and culturally acceptable to the public and hence to investors.     

Heterogeneity in learning processes and the evolution of dynamic managerial capabilities as a response of emergence of biosimilar market: evidence from the Indian pharmaceutical industry

ABSTRACT

This paper examines heterogeneity in the response of Indian firms to the emergence of a new segment in the pharmaceutical generics market – biosimilars. The necessary diversity of the knowledge base and regulatory requirements underlying biosmilar products have created significant technological capability and market access challenges for Indian firms. This is but the latest development which adds to an existing catalogue of challenges including the decline of the traditional generics markets, regulatory hurdles in advanced country markets and failures in managing new drug development. Using case studies of three Indian firms we show that dynamic managerial capability is a key driver of heterogeneity in learning processes involved in acquisition of technological capabilities for biosimilars and market access strategies. It further highlights the important role of pre-existing capabilities in enabling and constraining the development of new biosimilar capabilities.     

The Impact of Patents on Innovation,Technology Transfer and Health: A Pre- and Post-TRIPs Analysis of India's Pharmaceutical Industry

The debate surrounding the World Trade Organization's Trade-Related Aspects of Intellectual Property Rights (TRIPs) Agreement indicates that patents matter for development. Yet literature on the geography of knowledge transfer shows that knowledge is spatially sticky, suggesting that the impact of patents can be exaggerated. Using interview evidence, this paper explores how Indian pharmaceutical firms have responded to changes in patent law, including the introduction of more extensive patent protection in 2005 as a condition of TRIPs. A regime of limited patent protection for over three decades prior to TRIPs facilitated informal knowledge transfer and the emergence of a pharmaceutical industry with significant domestic capabilities. Contrary to some expectations, the Indian pharmaceutical industry has continued to grow post-TRIPs, with large domestic firms becoming involved in more formal technology transfer as part of an increasingly collaborative relationship with multinationals. This trend is also driven by a focus on the markets of developed countries, raising questions for the future sustainability of India's low-priced medicines. While changes in patent law can facilitate or inhibit a variety of aspects of development, the adaptation of the Indian pharmaceutical industry suggests that their impact must be related to the broader institutional setting, particularly the underlying domestic capabilities.     

The governance of agro- and pharmaceutical biotechnology innovation: Public policy and industrial strategy

Multinational companies in the life science sector are heavily influenced by government policies and regulations and in turn attempt to influence these actors nationally and internationally. This paper focuses on recent and on-going research, principally on the agro-biotechnology and, to a lesser extent, on the pharmaceutical industries, covering the evolution of policy and regulation in Europe, how policies are influenced by stakeholder pressures and how policy in turn influences company strategies for product development. We focus particularly on new 'governance' agendas in Europe and consider the relative impacts of enabling, constraining, discriminating and indiscriminate policies on company strategies as part of our development of an integrated approach to policy and governance. We also consider changes in external operating environments for multinational companies and compare past histories and present pressures on agro-biotechnology and pharmaceutical companies. The paper argues, with evidence, that a more enabling and discriminating policy and regulatory environment can achieve public goals more efficiently and effectively, taking account of impacts on innovation, than more blunt policy instruments. This type of environment takes into account the resources and capabilities available to firms and research laboratories rather than relying on broad brush carrot and stick approaches.     

The governance of agro- and pharmaceutical biotechnology innovation: Public policy and industrial strategy

Multinational companies in the life science sector are heavily influenced by government policies and regulations and in turn attempt to influence these actors nationally and internationally. This paper focuses on recent and on-going research, principally on the agro-biotechnology and, to a lesser extent, on the pharmaceutical industries, covering the evolution of policy and regulation in Europe, how policies are influenced by stakeholder pressures and how policy in turn influences company strategies for product development. We focus particularly on new ‘governance’ agendas in Europe and consider the relative impacts of enabling, constraining, discriminating and indiscriminate policies on company strategies as part of our development of an integrated approach to policy and governance. We also consider changes in external operating environments for multinational companies and compare past histories and present pressures on agro-biotechnology and pharmaceutical companies. The paper argues, with evidence, that a more enabling and discriminating policy and regulatory environment can achieve public goals more efficiently and effectively, taking account of impacts on innovation, than more blunt policy instruments. This type of environment takes into account the resources and capabilities available to firms and research laboratories rather than relying on broad brush carrot and stick approaches.     

The Dynamics of Pharmaceutical Patenting in India: Evidence from USPTO Data

This article analyses the impact of the implementation of the 'Agreement on Trade-Related Aspects of Intellectual Property Rights' (TRIPS) on various segments of the Indian pharmaceutical industry. In particular, it focuses on the conditions under which a strong patent system can create benefits for a developing country's pharmaceutical industry. The theoretical analysis suggests that the greater the technological capabilities of the Indian pharmaceutical industry the greater are its chances to benefit from the introduction of stronger intellectual property rights (IPRs). The evidence presented paints a generally positive picture of the state of the Indian pharmaceutical industry, with the existence of strong and growing technological competencies that can be used as a platform for further expansion. These conclusions are dependent on India's worldwide success in the industry and cannot be automatically applied to other developing countries, especially if their pharmaceutical industry is not strong at the moment of the transition to a stronger IPR regime.     

中小企业竞争战略

本文着重研究了中小企业的竞争战略。中小企业与大企业区分标准通常是依据员工人数多寡或每年总营业额，并根据不同产业而异。本文首先分析了中小企业的优势与劣势，并探讨了许多中小企业失败的原因。然后，着重探讨了中小企业不同的竞争战略，此种战略将为其带来竞争力并进而成功。虽然本文是以美国企业作为案例，但其主要架构与结论也适用于包括中国在内的其它国家之中小企业，因为不同国家的中小企业，有许多的相似性。     

The Role of Multinational Corporations and National States in the Globalization of Innovatory Capacity: The European Perspective

The recent ability of multinational corporations (MNCs) to develop integrated technological networks, increasingly motivated within Europe by the further progress of economic integration, is argued to affect and be affected by national technological competitiveness. This paper examines the precise geographical dispersion of technological activity in Europe by the largest MNCs, and the potential impact of those MNCs on the level and structure of the technological capacity of European home and host countries, using data on patents granted to the world largest firms in the US. Since the late 1980s, the majority of the technological activity conducted in foreign-owned research facilities located in Europe, has taken place in affiliates of European-owned companies. This paper examines whether the much higher degree of internationalization of corporate technology in European MNCs than in their US or Japanese counterparts is attributable to cross-border activity within Europe, or extends to European-owned research facilities in the US and Japan. While intra-European activity matters more for Dutch, Belgian and Swedish MNCs (and in the electrical equipment and computing industries), whose strategies are substantially based on corporate European integration, investments in the US are of greater significance for French and Swiss companies, and of the greatest importance for German and British firms (and in the chemical and pharmaceutical industries), representing a more widely 'globalized' technological strategy.     

TRIPs and patenting activity: Evidence from the Indian pharmaceutical industry

This paper studies the impact of the strict patent regime on the patenting activity of Indian pharmaceutical firms and finds that patenting activity of these firms has increased after the signing of TRIPs. The study is conducted for 65 pharmaceutical firms for the period 1991 to 2004 using different parametric and semiparametric count panel data models. Results across different count data models indicate a positive and significant impact of the introduction of stronger patents on patenting activity. Further, the results show a gestation lag of 2 years between R&D spending and patent applications.     

智力资本要素内部契合对探索式创新和利用式创新的影响

为探究知识经济时代企业如何充分利用智力资本提升创新水平,基于人-组织契合理论,构建智力资本跨维度契合影响创新战略理论模型,运用回归分析法,对中国246家高技术企业样本进行实证分析。结果发现,组织资本与人力资本辅助性契合对利用式创新具有正向影响;社会资本正向调节组织资本与人力资本辅助性契合对利用式创新和探索式创新的影响;组织资本、人力资本和社会资本补充性契合正向影响双元型创新。     

The Role of Multinational Corporations and National States in the Globalization of Innovatory Capacity: The European Perspective

The recent ability of multinational corporations (MNCs) to develop integrated technological networks, increasingly motivated within Europe by the further progress of economic integration, is argued to affect and be affected by national technological competitiveness. This paper examines the precise geographical dispersion of technological activity in Europe by the largest MNCs, and the potential impact of those MNCs on the level and structure of the technological capacity of European home and host countries, using data on patents granted to the world largest firms in the US. Since the late 1980s, the majority of the technological activity conducted in foreign-owned research facilities located in Europe, has taken place in affiliates of European-owned companies. This paper examines whether the much higher degree of internationalization of corporate technology in European MNCs than in their US or Japanese counterparts is attributable to cross-border activity within Europe, or extends to European-owned research facilities in the US and Japan. While intra-European activity matters more for Dutch, Belgian and Swedish MNCs (and in the electrical equipment and computing industries), whose strategies are substantially based on corporate European integration, investments in the US are of greater significance for French and Swiss companies, and of the greatest importance for German and British firms (and in the chemical and pharmaceutical industries), representing a more widely ‘globalized’ technological strategy.     

审计行业监管有效性研究——基于证监会处罚公告后事务所策略选择的经验证据

随着近年来审计失败案件的频发,政府对审计行业监管的作用越来越受到关注.文章基于证监会行政处罚公告,对受罚事务所与上市公司客户进行配对,研究了处罚公告对受罚事务所与未受罚事务所声誉及审计质量的影响.研究发现,受罚事务所在处罚公告后进行了声誉重塑行为,审计质量得到改善;未受罚事务所在处罚公告后保持原有审计标准,公告前后审计质量无显著变化.而处罚公告后,受罚事务所的审计质量显著高于未受罚事务所,表明证监会的监管改善了行业的审计质量.文章为证监会行政处罚的有效性提供了更多的经验证据,并证实了声誉机制对注册会计师的约束作用;研究结果对证监会、中注协、财政部等监管部门具有借鉴意义,对上市公司与会计师事务所签订审计合约也有非常重要的参考作用.     

Grand strategies and strategic actions in the pharmaceutical industry 2001–2002

This paper explores the strategic actions realised by firms in the pharmaceutical industry during 2001 and 2002. The purpose was to develop an empirically derived categorisation of strategic actions and grand strategies from the behaviour of firms that could be used as the basis of a methodological framework for developing understanding of strategic change. Qualitative analysis was used to identify and categorise strategic actions implemented by pharmaceutical firms. Twenty-three grand strategies were identified and are described. Implications for further research in strategy development are discussed.     

Competition and Industry Performance: A Panel VAR Analysis in Indian Manufacturing Sector

This study tries to investigate the relationship between competition and performance in a dynamic framework in the post liberalisation era with the help of Structure Conduct Performance paradigm. By employing panel VAR estimation procedure on 23 Indian manufacturing industries that comprise of BSE listed manufacturing firms, the study finds that Structure Conduct Performance paradigm does not always hold true in Indian manufacturing scenario in the post liberalisation period. This might be because with the introduction of competition in the market, the larger firms are still practising anticompetitive strategies to have a control over the market. The relationship between performance and conduct indicates that competition has not fully succeeded in eliminating the imperfections from the market.

     

Technological races and stock market value: evidence from the pharmaceutical industry

We provide estimates of the abnormal stock market returns associated with pharmaceutical firms’ announcements of technological and regulatory successes in drug development. On the basis of these estimates, we find empirical support for two key features of technological race models. First, we observe that leaders in the innovation race record higher abnormal returns than do latecomers when they announce a success. Hence, firms should indeed be racing to complete the innovation process before their rivals. Second, pharmaceutical firms are adversely affected by the technological and regulatory success of their rivals, implying that interfirm spillovers in drug development are not sufficient to offset technological rivalry. Additional results are also produced regarding the impact of competition on R&D racing and the extent of therapeutic competition.