Conclusions and Policy Suggestions

Abstract

The Indian pharmaceutical industry is at the crossroads due to the recognition of the product patent in the amended Patent Act of 2005 and the gradual liberalization policy of the government of India. While the recognition of product patents is a big challenge for Indian pharmaceutical companies that have hitherto relied on imitation for their growth, the liberalization of the market economy has also opened up new opportunities for Indian pharmaceutical firms. In response to policy changes and growing competition, firms started adopting new strategies like increased outlays in R&D related activities, endeavors to sell their product in the global market and investment in plant and machinery. However, the benefit from such change may not be immediate. Also, when access to resources and technology differs across firms, the process of liberalization may create winners and losers and performance differences may widen between firms.