Dinar Kale

From Imitation to Innovation: The Evolution of R&D Capabilities and Learning Processes in the Indian Pharmaceutical Industry

Abstract Since the mid 1990s the Indian pharmaceutical industry has emerged as a leading supplier of generic drugs to both developing and developed countries.The movement of the Indian pharmaceutical industry along the R&D value chain represents a remarkable shift from an importer to an innovator of drugs. The Indian governments industrial and technology policies along with changes in regulation of intellectual property rights played a crucial role in shaping this development of R&D capability. Using the ‘capability creation model’ this paper discusses the learning processes and stages involved in this dramatic accumulation of technological capability. This analysis shows that the Indian pharmaceutical industry has followed a trajectory from duplicative imitation to creative imitation to move up the value chain of pharmaceutical R&D. Finally as a result of changes in patent law the industry is learning to develop capabilities in innovative R&D. The basic and intermediate technological capabilities gained from imitative learning gave these firms a solid base for development of competence in advanced innovative R&D. These findings have implications for government policies as well as firm strategies in other developing countries albeit with some limitations due to global harmonisation of patent laws being promoted by the World Trade Organization.

The Dynamics of Pharmaceutical Patenting in India: Evidence from USPTO Data

Abstract This article analyses the impact of the implementation of the ‘Agreement on Trade-Related Aspects of Intellectual Property Rights’ (TRIPS) on various segments of the Indian pharmaceutical industry. In particular, it focuses on the conditions under which a strong patent system can create benefits for a developing countrys pharmaceutical industry. The theoretical analysis suggests that the greater the technological capabilities of the Indian pharmaceutical industry the greater are its chances to benefit from the introduction of stronger intellectual property rights (IPRs). The evidence presented paints a generally positive picture of the state of the Indian pharmaceutical industry, with the existence of strong and growing technological competencies that can be used as a platform for further expansion. These conclusions are dependent on Indias worldwide success in the industry and cannot be automatically applied to other developing countries, especially if their pharmaceutical industry is not strong at the moment of the transition to a stronger IPR regime.

Diffusion of knowledge through migration of scientific labour in India

‘Brain drain’ is viewed as a curse for developing countries but analysis suggests it may provide crucial advantage to some countries. ‘Reverse brain drain’ of engineers and scientists trained in the USA or Europe can accelerate technological catch-up. Communities of returned scientists and engineers can provide skill and know-how to help local firms shift to higher value-added activities. However, transfer of knowledge through human mobility is not a straightforward process. This paper presents insights regarding diffusion of knowledge through migration of scientific labour, using case studies of innovative Indian pharmaceutical firms. Copyright , Beech Tree Publishing.

International migration, knowledge diffusion and innovation capacities in the Indian pharmaceutical industry

Evidence suggests that a ‘reverse brain drain’ of engineers and scientists trained in the USA or Europe can accelerate technological upgrading in knowledge-based firms in emerging countries. This study, through case studies of four innovative Indian pharmaceutical firms, considers Human Resource Management strategies adopted by firms in a developing country to attract and retain their scientific workforce.

Biosimilars and the long game

Despite greater certainty for biosimilar markets and regulation, the change that was seen in the small-molecule pharmaceuticals market with the rapid entrance of emerging-country generics suppliers will not be replicated exactly. The long game has yet to be played out, and recent changes in regulation, science, and production technology are likely to impact on future patterns of partnership and production.

INNOVATIVE CAPABILITY DEVELOPMENT IN THE INDIAN PHARMACEUTICAL INDUSTRY

With increasing globalization, firms in emerging countries are facing turbulent business environment that is marked by liberalization of economic policies and regulatory changes. In such cases firms have to undertake dynamic learning to develop new capability. In developing countries the challenge for firms to develop new competencies is more complex due to political and economic complexities. This paper shows the key role of Diaspora scientists and collaborative models of R&D in development of innovative capabilities in the Indian industry. It also reveals that Indian firms transformed their business models as a response to changing external environment and raises questions regarding future development of the industry.

New drugs and health technologies for low-income populations: will the private sector meet the needs of low-income populations in developing countries?

This paper argues that the development of targeted health technologies for poor people will require a new mix of technology, organizations and institutions which we conceptualize as new social technologies. Using a technology–market matrix, we explore these new social technologies which may sometimes include multi-national companies but are also associated with developing country private sector firms and not-for-profit product development partnerships. The paper argues that these collaborative forms of social technology are most likely to generate and deliver new physical technologies and innovation processes required by low-income users.

Flows and Cohesion: Balancing Capabilities Across an Expanded Union

Until recently the flow of skilled workers to established centres from more peripheral regions was seen as a ‘brain drain’, implying a one‐way and permanent loss of skilled labour. However, increasing mobility and connectivity permits more complex traffic between more and less advanced locations. With the emergence of a global economy dependent on flows of material and intellectual capital, the notion of ‘brain circulation’ has gained prominence. Understanding the potential benefits of migration to both donor and recipient economies must move beyond financial remittance to social remittance. As connectivity increases, both become capacity‐building resources. This article discusses the impact of a combination of greater physical mobility and electronic connectivity on the dual objectives of social cohesion and technical leadership being pursued through the policies of the European Commission.

Heterogeneity in learning processes and the evolution of dynamic managerial capabilities as a response of emergence of biosimilar market: evidence from the Indian pharmaceutical industry

ABSTRACT This paper examines heterogeneity in the response of Indian firms to the emergence of a new segment in the pharmaceutical generics market – biosimilars. The necessary diversity of the knowledge base and regulatory requirements underlying biosmilar products have created significant technological capability and market access challenges for Indian firms. This is but the latest development which adds to an existing catalogue of challenges including the decline of the traditional generics markets, regulatory hurdles in advanced country markets and failures in managing new drug development. Using case studies of three Indian firms we show that dynamic managerial capability is a key driver of heterogeneity in learning processes involved in acquisition of technological capabilities for biosimilars and market access strategies. It further highlights the important role of pre-existing capabilities in enabling and constraining the development of new biosimilar capabilities.

Industry associations, health innovation systems and politics of development: The cases of India and South Africa

Over the last 20 years, developing countries have witnessed the increased role of non-governmental actors such as health industry associations and umbrella organizations in the diffusion and governance of health innovation. Utilizing extensive interviews with actors in the Indian and South African health industries, this paper argues that, in a context of emerging pluralism – i.e., a dynamic context of bargaining between competing (public and private) interests and values – these associations constitute public actors that play dual roles in the politics of innovation and development. Specifically, not only do they engage downstream by diffusing knowledge to their respective health innovation systems in order to achieve common objectives, they also engage upstream with their governments to co-develop policies and regulations. This dual role of health industry associations and umbrella organizations makes them less neutral politically but more effective institutionally, and their innovative and political role should be seriously taken into account in the healthcare sector.