Efficiency trends in the Indian pharmaceutical industry in the new patent regime

Mahajan, Varun; Nauriyal, D. K.; Singh, Sanjay Kumar

doi:10.1504/ijbpm.2015.072238

Cited by 6 publications

(4 citation statements)

References 14 publications

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“…With the implementation of the Patent (Amendment) Act of 2005, a major thrust on R&D and new drug development was experienced in the Indian pharmaceutical industry (Mahajan et al, 2018). Apart from increased investment in R&D, firms were driven towards enhancing efficiency to survive and maintain sustainable growth in a price competitive environment, especially after the onset of the TRIPS product patent regime (Mahajan et al, 2015).…”

Section: Resource-based Viewmentioning

confidence: 99%

“…There are several studies which focus on the impact of the product patent regime on the Indian pharmaceutical industry, but few have investigated the factors that drive the performance of firms in the industry. Studies by Chaudhuri and Das (2006), Mahajan et al (2015), Mazumdar and Rajeev (2012), Pannu et al (2011), Saranga and Phani (2009) and Mahajan et al (2018) have attempted to understand the efficiency of the firms, but have not focused on trying to identify the resources which drive performance. This paper aims at understanding this aspect and contributes to the existing body of literature.…”

Section: Resource-based Viewmentioning

confidence: 99%

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Research and development efforts in Indian pharmaceutical industry: How much does it matter?

Shivdas

Ray

2021

IJPHM

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Purpose The economic value generated by a firm is determined by the efficient management of its resources within a given business environment. The Indian pharmaceutical industry is highly competitive and has attracted huge investments in research and development (R&D), including financing of biotechnological ventures, clinical trials, contract research activities in addition to traditional product development and filing of regulatory requirements. This study aims to identify the specific resources that are significant drivers of performance. Design/methodology/approach Data analysis uses panel regression based on an extended version of the Cobb-Douglas production function, where the dependent variable firm performance is measured using annual sales whilst the independent variables include labour, capital, R&D investments and marketing efforts. This study uses data spanning a period of 7 years (2012–2018) collected from 151 Indian pharmaceutical firms. Findings Contrary to the general understanding that R&D investments tend to create profitable opportunities, it is observed that R&D expenditures have a negative impact on sales in the short to medium time period. This study also highlights the finding that in addition to the positive impact of labour and capital, marketing efforts are more likely to have a greater positive influence on firm performance than R&D. Originality/value The uniqueness of the paper lies not only in the counterintuitive findings but also in the methodology used to capture the impact of the lagged effect of R&D investments on firm performance. Specifically, a regression model-based both on panel data and time-series averages is used to examine the said impact.

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Section: Resource-based Viewmentioning

confidence: 99%

Section: Resource-based Viewmentioning

confidence: 99%

Research and development efforts in Indian pharmaceutical industry: How much does it matter?

Shivdas

Ray

2021

IJPHM

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“…Second, efficiency evaluation, which is a state-of-the-art parameter across the globe. It calibrates financial analysis by ascertaining how well the resources have been utilized by companies (Halkos & Tzeremes, 2013; Mahajan et al, 2015). It is relative, those companies at the frontier are considered to be efficient and are benchmarked at ‘1’, while those that are not, inefficient and are given scores between ‘0’ and ‘1’ (Cummins & Xie, 2009).…”

Section: Introductionmentioning

confidence: 99%

Has the Product Patent Regime Impacted Mergers and Acquisitions? Unveiling with a Systematic Literature Review

Verma

Agrawal

2021

FIIB Business Review

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Mergers and acquisitions (M&As) are one of the most practised inorganic strategies to multiply economic profits, acquire new product capabilities, expand markets, diversify risk and bring synergistic gains. The purpose of the study is to review the literature related to companies’ financial analysis, pre and post-M&A after the Patents (Amendment) Act, 2005. The study follows a systematic literature review (SLR) process where 128 research publications from 2005–2020 are examined after applying the required review protocols. SLR found a deficient practical contribution of the limited literature on the three perspectives, namely, from accounting, productivity and managerial perspectives at the international level. Furthermore, there is also a dearth of studies from the three perspectives for the Indian Pharmaceutical Industry (IPI) post the Patents (Amendment) Act, 2005. This review finds that there is a need for a unified approach for evaluating the success of M&A in IPI. Future studies can encourage research that ties these three perspectives to a common thread and furnishes a holistic approach for analysis. It will further bolster the research to provide practical insights to companies’ rooting for a robust financial analysis.

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“…In this connection, Chaudhuri and Das (2006) used stochastic frontier analysis (SFA) to measure efficiency of the industry. Non-parametric data envelopment analysis (DEA) has been applied by some studies (Mahajan, Nauriyal, & Singh, 2014, 2015; Mazumdar & Rajeev, 2012; Mazumdar, Rajeev, & Ray, 2009; Pannu, Dinesh Kumar, & Farooquie, 2011; Saranga, 2007; Saranga & Phani, 2009; Mahajan et al, 2014a, 2014b, 2015) to measure efficiency of the industry. Internationally, only a few empirical studies (Gonzalez & Gascon, 2004; Hashimoto & Haneda, 2008) have analysed efficiency of this industry using DEA.…”

Section: Introductionmentioning

confidence: 99%

Efficiency and Its Determinants: Panel Data Evidence from the Indian Pharmaceutical Industry

Mahajan¹,

Nauriyal²,

Singh³

2018

Margin: The Journal of Applied Economic Research

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The study determines the efficiency of Indian pharmaceutical firms and its determinants in the pre-and post-product patent regime. Overall inefficiency in the industry is higher due to the inefficient conversion of inputs into output rather than through scale inefficiency. The study finds that the Product Patent Act has a negative impact on efficiency. Ownership, capital imports intensity and size variables are positively related with efficiency scores whereas age, time dummy and size square variables are inversely related. The study supports the finding that with an increase in mergers and acquisitions, a movement towards diversifying operations, the use of advanced imported foreign technology, investment in fixed assets and judicious allocation of resources for marketing activities could improve firm performance. For future policy implications, the small firms may either merge into bigger entities or manufacture pharmaceutical products for other companies, so as to raise operational scale and improve capacity utilisation.

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Efficiency trends in the Indian pharmaceutical industry in the new patent regime

Cited by 6 publications

References 14 publications

Research and development efforts in Indian pharmaceutical industry: How much does it matter?

Research and development efforts in Indian pharmaceutical industry: How much does it matter?

Has the Product Patent Regime Impacted Mergers and Acquisitions? Unveiling with a Systematic Literature Review

Efficiency and Its Determinants: Panel Data Evidence from the Indian Pharmaceutical Industry

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