Analysis of the strategy of MNCs in Indian pharmaceutical industry

Abstract

India's pharmaceutical sector is currently undergoing unprecedented change. From being a pure reverse engineering industry focused on the domestic market, the industry is moving towards basic research-driven, export-oriented global presence, providing wide range of value added quality products and services. It currently ranks no. 1 in the world in terms of the wide range of capabilities in the complex field of drug manufacture and technology. It is a highly organized sector and fragmented with more than 20,000 registered units. (DFID, 2008) It is drastically expanding and has grown rapidly in the last two decades. Liberalization of 1990s had allowed 100% entry of FDI in the sector. Indian companies had till then carved a niche in both the Indian and world markets with their expertise in reverse-engineering new processes for manufacturing drugs at low costs. There are a few shortcoming of the industry which includes 5-10% R&D spends by Indian companies while MNCs invest in R&D to the tunes of revenues of some Indian companies.