Innovations in Indian Drug and Pharmaceutical Industry: Have they impacted Exports?

Abstract

The paper examined the trends in exports, imports, R&D performance and patenting activity in the Indian drug and pharmaceutical industry for a period 2000-2012. Although most of the analysis is of descriptive nature drawing upon different databases, it also estimates the functional relationship between exports as dependent variable with patents granted and R&D expenditure as independent variable through OLS regression. The OLS model found that lagged R&D expenditure and lagged total patents granted affect exports positively and significantly due to innovations carried out across different drug classes and treatment categories. The Indian firms have also been found to be recording a relatively steady growth in patent filing except for Ranbaxy which has experienced a sharp decline in patent output after 2006 because of increasing cases of litigations for the infringement of patent rights of other pharma majors.