A case study of the pharmaceutical industry in India
Added on 2021-06-10
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Case Study onBiocon India GroupSubmitted to: Muhammad Maruf Ibne WaliNorth South University Submitted by: Section: 5 Name ID Samman Rahman 1721906630 Sabbir Hosen Riaz 1712752630 Akibul Islam 1513191030 Jarin Tasnim Preyata 1620445030 Barirah Alam Samira 1330076630 This study source was downloaded by 100000756405043 from CourseHero.com on 05-21-2021 05:53:16 GMT -05:00https://www.coursehero.com/file/47133046/Biocon-Casepdf/ThisstudyresourcewassharedviaCourseHero.com
1. What are the advantages and disadvantages of starting and operating a pharmaceutical firm in India? Advantages: There is quite a number of advantages and disadvantages for starting and operating a pharmaceutical firm in India. The advantages are laid down below: Patent laws of India: In the mid-1970s, Indian government implemented an act called Drug Price Control Order (DPCO). DPCO law had led a huge change in the generic drug manufacturing industry in India. Many new players had increased their size of operation and made a good profit out of it. Currently, The pharmaceutical industry in India ranks in the 3rdposition in the world in terms of volume of production and value.Well established industry: According to the Department of Pharmaceutical in India, the total turnover of this industry between the year 2008 and 2009 was worth $21 billion and the number is only increasing making solely the domestic market worth $16 billion at this moment. At the beginning of its journey in 1947, The Indian market was dominated by foreign companies. But starting from 1970s with the liberalization of patent laws, a lot of domestic companies had started their operation which has led the industry to see more than 20,000 domestic companies in operation. India is also considered to be a pioneer of low cost generic drug exporter.High quality scientists: There are several well recognized research institutes within the border of India. A large number of PhD graduates are seen to be joining the field of biology and chemistry. Despite being the 4thcountry with most doctoral graduates, the cost of hiring these scientists are surprisingly low comparing to the western world. These well-educated and English speaking graduates play a huge role in the overall success of pharmaceutical industry in India.Diverse population: Clinical trials are one of the most crucial part of a medical science. It is the most important step in the drug development chain. Having a vast and diverse population has incentivized the clinical trial process greatly to develop new medicines. Indian CRO for clinical trials have also become very popular among multinational pharmaceutical companies like GlaxoSmithKiline and Sanofi.Political incentives for manufacturing firms: Indian government has continuously promoted local manufacturing for all products that sell within their border. In recent years, This study source was downloaded by 100000756405043 from CourseHero.com on 05-21-2021 05:53:16 GMT -05:00https://www.coursehero.com/file/47133046/Biocon-Casepdf/ThisstudyresourcewassharedviaCourseHero.com
the government had subsidized on raw material procurement and exports which has made the pharma an attractive industry to set foot in. Dedicated governmental organizations like DST also provides support for research and development for this industry.Low cost operation: The cost of operation, especially in the Research and Development sector is much cheaper in India compared to countries like USA, Germany or Canada. This cheaper operation cost is one of the key factors that had let Indian pharmaceutical industry to flourish over time.Disadvantages: Despite having numerous advantages to join this, industry there are also some disadvantages which has let many domestic companies to suffer as well. Some of the disadvantages are: Weak product patent laws: The laws related to patents of specific products or genomes have a limited time span with a threat of getting stolen and replicated. Due to not having enough technical knowledge of a delicate product like medicine, Law enforcement agencies are not always very helpful to tackle such situations. Ethical issues with clinical trials: Clinical trials requires trying out different medicines in the development stage on actual people. However, most of the people in India are uneducated which raises questions on how ethical clinical trials are on these people. With the easy access of internet and popularity of social media, tarnishing a company’s image over unethical clinical trials can cause a lot of problems for companies of all sizes. Market competitiveness: As described earlier, Pharma is one of the most lucrative industry in India. So, it is natural for companies to expect a competitive market. A recent study has shown that there are more than 23000 domestic players in the Indian pharmaceutical industry. Such competition requires companies to invest heavily on innovation of new drugs that gives them a competitive edge. International companies: From the very beginning of the pharma industry’s inauguration, Multinational companies have started operating in India. However, when the market was saturated with domestic players, foreign companies were not making as much profit as before. But after the 2005 product patent act, more foreign companies look at India as viable investment location considering the low cost manufacturing process and skilled This study source was downloaded by 100000756405043 from CourseHero.com on 05-21-2021 05:53:16 GMT -05:00https://www.coursehero.com/file/47133046/Biocon-Casepdf/ThisstudyresourcewassharedviaCourseHero.com
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