RETHINKING THE JOINT VENTURE
Kishore – 01
STRATEGY Abhay
Abhishek Kunal – 05
Anil Kumar Jadli – 11
J.Harish – 25
Khushal Malik – 28
Sharad Singh – 49
PHARMACEUTICAL INDUSTRY – Global
Trend
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Mainly concentrated in the United States, Europe, and Japan
Developing a drug from discovery to launch took 10 to 12 years.
Cost of development of drug is between $500-$800 million.
Drugs were strictly controlled by government agencies: o Food and Drug Administration (FDA) – USA,
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CPMP – Europe
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MHW – Japan
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DPCO & Indian Patent Act - India
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Size of industry : USD 960 billion in 2012.
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Few Firms control entire market (Oligopoly).
• 4 Firms – Control 20% ,
• 20 Firms – 50-60%,
• 50 Firms – 65-75%
PHARMACEUTICAL INDUSTRY – Global
Trend
• Covered the chemical substance itself
• Offered typically 20 years of protection
• Usually a lag time of
10-12 years by the time the patent was obtained and the launch date
• Covered the method of processing or manufacturing the product • Very little protection because it was easy to slightly modify the process Global Issues in Pharma Sector
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Prices in of the drugs varied in developed countries
• US & Canada by factor 1.2 to 2.5.
• Europe by factor 1.1 to 2.5.
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Parallel Trade: an outside company sells a patented product in a market not designated to sell the drug. o Independent firm exploited parallel trade by using the differentials in price across various countries.
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Generic Drugs: unbranded drugs of comparable efficacy available at fractional cost of branded product. o Posed as major challenge for pricing power of large pharma companies.
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No additional expense for drug R&D of new compounds.
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Generic companies made money by copying the products discovered & developed by other major pharmaceuticals companies.
Issues in Indian Pharma Sector
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Initially country had no indigenous production capability & was totally dependent on imports.
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Post independence HAL (promoted by WHO