Open AccessForeign Direct Investment in Pharmaceutical Sector: Role Analysis and Case Study
Author(s) -
Ranjana Pandey Mishra
Publication year - 2020
Publication title -
international journal of advanced research in science, communication and technology
Language(s) - English
Resource type - Journals
ISSN - 2581-9429
DOI - 10.48175/ijarsct-392
Subject(s) - intellectual property , foreign direct investment , business , pharmaceutical industry , outsourcing , multinational corporation , government (linguistics) , productivity , incentive , government procurement , international trade , procurement , trips architecture , investment (military) , trips agreement , international economics , industrial organization , economics , finance , developing country , marketing , market economy , economic growth , microbiology and biotechnology , philosophy , law , macroeconomics , linguistics , computer science , biology , parallel computing , political science , politics , operating system
India’s economic reforms since 1990s and World Trade Organisation’s agreement on trade related aspect of Intellectual Property Rights have caused significant changes in the operational environment of Indian Pharmaceutical industry (IPI). This study examines the Foreign Direct Investment flows into the firm of IPI. Foreign companies dominates the Indian pharmacy industry due to availability of cheap labour. The basic opinion is that the Expenditure on Research & development is very low in India. The General Agreement on Tariffs and Trade (GATT) and Trade Related Aspects of Intellectual Property Rights (TRIPS) has an adverse impact on pricing of pharmaceutical products. The Indian pharmaceutical industry has developed through a range of governmental incentives and, foreign firms that have invested in the industry have additionally contributed to the growth. The firms with foreign ownership experience higher productivity levels. It is possible that under the new patent laws, MNCs will start to outsource even patented drugs in India; consequently Researcher recommends that the government must look at the option of alternative public policies like public procurement of generic drugs. The domestic industry should be encouraged to produce cheap medicines. The R&D from the foreign companies must be encouraged. Researcher’s limitation in this secondary research is that the quality of secondary research should be scrutinized closely since the origins of the information may be questionable.