Investing in the Indian Pharmaceutical Industry
Case number:
A03-99-0015
Abstract
In 1991 India reversed a traditional policy that had restricted direct foreign investment and introduced a regime that welcome it. Many foreign companies that had previously avoided India started to invest with great enthusiasm. Yet participation by multinational pharmaceutical firms was conspicuously absent. The case examines the pharmaceutical industry in India and concludes that the absence of effective patent protection for pharmaceutical products was a major reason for the lack of investment in this sector in India.
Teaching
This case can be used in any class dealing with intellectual property or direct foreign investment, and would be particularly useful in demonstrating the contrasting views between developed and developing countries. Class discussion should include the drafting of a new patent law for India, complying with TRIPS, yet maintaining sufficient flexibility to assure manageable pricing for the Indian consumer. Some prior knowledge by the students of intellectual property issues and regulating foreign direct investment would enhance the value of the case. The case is also applicable to discussions of the pharmaceutical industry as it illustrates the importance of patent protection to the construction and maintenance of competitive positioning in that industry.
Case number:
A03-99-0015
Subject:
Business
Government
International Policy
Year:
Setting:
India, 1990s
Length:
15 pages
Source:
Field case