Emergence of the Biosimilar Sector and Opportunities of Developing Country Suppliers

As biologic products begin to come off-patent, a market is emerging for biosimilars (also known as biogenerics or follow-on biologics). Firms from emerging countries such as India and China have dominated the production of active ingredients in pharmaceutical industries all over the world and are now developing capabilities in biosimilar production. This emergence of a new market dynamic is disruptive to current key players as it has potential challenge their current dominant hold over the market, while for firms from developing countries it creates a sea of opportunities. This rise of biosimilars and capabilities for cheap production in developing country firms has potential to transform patient care in developing countries as well as advanced countries. This paper reviews study data collected at Innogen and the most recent literature to understand how the sector for biosimilars is evolving and the opportunities and challenges faced by emerging suppliers. The aim of the paper is to identify the gaps in the current literature and opportunities for further study in this area

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

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

Re-developing knowledge creation capability: Innovating in Indian pharmaceutical industry under the TRIPS regime

The transition to a new technology, market or regulatory regime can be difficult for any organisation to manage. Technological and institutional change has proven to be a big cause for the failure of established firms and many examples exist of such failures. The Trade Related intellectual property rights agreement (TRIPs), as part of The World Trade Organization (WTO) agreement, represents such an institutional change for knowledge based industries from developing countries. As a result of the TRIPs agreement all of the WTO member countries will move from no or partial patent protection to fully fledged patent protection. This represents a radical break with the past in which developing countries typically had only weak levels of patent protection. Against this backdrop, the research examines the learning processes involved in the development of innovative R&D capabilities within the context of the Indian pharmaceutical industry, in response to the strengthening of patent law. In the last decade much research has addressed the process of dynamic learning within firms, however this has predominantly focused on firms from advanced countries. Previous research on developing countries mainly focused on building the minimum knowledge base essential for production and innovation activity. In recent years limited research has begun to explore dynamic learning in firms from developing countries. However, there still remains a scarcity of research which examines firm-level learning processes central to the development of advanced level capabilities. This research addresses this deficiency by applying the conceptual understanding developed within advanced countries to a developing countries context. This is operationalised through a set of research activities which investigate firm-level learning, knowledge creation and innovative capability within the context of the Indian pharmaceutical industry. The substantive conclusions are that the development of new capabilities involves the removal of redundant capabilities, coupled with the acquisition of new knowledge. The findings also indicate that Indian firms are hiring Indian scientists educated or working overseas in multinational pharmaceutical R&D and collaborating with Indian and overseas research institutes and universities to acquire capabilities in innovative R&D. Furthermore, inter-firm differences in learning processes suggest that at a firm level, learning is neither linear nor automatic and requires a deliberate strategy. The thesis also provides important insights into knowledge creation capabilities that have significant implications with respect to innovative activity for firms from other developing countries

Regulation quagmire, inclusive innovations and arrested development: evidence from the Indian medical device industry

In any healthcare sector, the medical device industry plays an important role in reducing overall healthcare costs and ensuring effective access to healthcare. However, in developing countries such as India compared to the success of the pharmaceutical and biotechnology industry, the medical device industry has not witnessed similar growth. In this context this paper studies factors and issues that hampered development of the medical device industry in India. Specifically it explores the link between regulatory policies and their impact on innovation and technology capability development in the Indian medical device industry. Further it examines the complex relationship between healthcare regulation, innovation, and sustainable development within the context of an increasingly globalising economy. It shows crucial role of smart and appropriate regulation in creation of the basic technological capabilities, incentivising inclusive innovation and affordable healthcare

From small molecule generics to biosimilars: Technological upgrading and patterns of distinctive learning processes in the Indian pharmaceutical industry

Technology upgrading is a key element of industrialisation and catch-up in developing countries. It is understood that a successful technology upgrading is linked to a coupling of global knowledge flows with local technology effort. However, the changing nature of technology and industries are challenging existing processes involved in the technology upgrading and creating new patterns of capability development. This raises the questions about factors and processes involved in technology upgrading in firms from developing countries. In this context, this paper explores the movement of Indian pharmaceutical firms from ‘small molecule generics’ towards targeting a new set of opportunities presented by the emergent biosimilar segment in the global generics market. Some leading Indian firms have adopted this technological upgrading route by making a gradual transition towards the development of biosimilar capabilities and using four case studies, this paper reveals internationalisations in form of overseas acquisitions and collaborations with MNCs formed the key basis of technology upgrading strategy for the Indian firms. This paper further shows the hiring of biotech scientists working in advanced countries increasing R&D investment and reorganisation of R&D contributed to managerial upgrading and played a significant role in creating firms' ability to absorb external knowledge

From small molecule generics to biosimilars: Technological upgrading and patterns of distinctive learning processes in the Indian pharmaceutical industry

Technology upgrading is a key element of industrialisation and catch-up in developing countries. It is understood that a successful technology upgrading is linked to a coupling of global knowledge flows with local technology effort. However, the changing nature of technology and industries are challenging existing processes involved in the technology upgrading and creating new patterns of capability development. This raises the questions about factors and processes involved in technology upgrading in firms from developing countries. In this context, this paper explores the movement of Indian pharmaceutical firms from ‘small molecule generics’ towards targeting a new set of opportunities presented by the emergent biosimilar segment in the global generics market. Some leading Indian firms have adopted this technological upgrading route by making a gradual transition towards the development of biosimilar capabilities and using four case studies, this paper reveals internationalisations in form of overseas acquisitions and collaborations with MNCs formed the key basis of technology upgrading strategy for the Indian firms. This paper further shows the hiring of biotech scientists working in advanced countries increasing R&D investment and reorganisation of R&D contributed to managerial upgrading and played a significant role in creating firms' ability to absorb external knowledge

Submission to the United Nations Secretary General's High Level Panel on Access to Medicines

Much of the current debate on health care goals, medical innovation and trade rules focuses on the misalignment between the need to provide incentives to innovation – mainly through a tight intellectual property (IPR) regime – and the resulting negative consequences in terms of access to medicines. While this clash is certainly crucial, this contribution focuses on a different aspect of the misalignment between innovation and access, concerning essential drugs and generics rather than brand new, innovative drugs. This contribution argues that the promotion of domestic drug production and innovative capabilities in low and middle income countries, and notably on the Sub-Saharan African subcontinent, can may constitute an important step towards achieving significant improvements in public health – as a human right that includes access to essential medicines. We provide background and evidence for this argument. We then draw out policy implications, arguing that increased policy coherence between health policies for medicines access and public health, and industrial and trade policies for Africa-based pharmaceutical production and innovation, are both feasible and beneficial, generating synergies between improved medicines access and local industrial innovation

Experimentation with Strategy and the Evolution of Dynamic Capability in the Indian Pharmaceutical Sector

This paper demonstrates that radical regulatory changes can be tantamount to technological revolutions by studying Indian pharmaceutical firms. It shows that radical regulatory changes such as the Indian Patent Act of 1970, the New Industrial Policy of 1991 and the signing of TRIPS (Trade Related Intellectual Property Rights System) in 1995 served to open up new economic opportunities and constraints in the wake of which the winners and losers were selected as a function of the dynamic firm capabilities most appropriate for the new market environment.International Marketing, R&D Management, India, Pharmaceutical Sector, Corporate Strategy

Knowledge generation in developing countries: a theoretical framework for exploring dynamic learning in high technology firms

In the case of events such as fundamental regulatory reforms or radical technological advances, firms have to undertake discontinuous or dynamic learning. Such learning involves the generation of new capacity through the acquisition of new knowledge and the combination of it with the firm's existing accumulated knowledge. In developing countries the challenge for firms to develop new competencies through dynamic learning is more complex due to political and economic complexities. This paper discusses the limitations of existing frameworks for analysing the process aspect of transformation and proposes a theoretical framework with which to explore dynamic learning in firms from developing countries. The proposed theoretical framework is based on a constructivist approach to organisational knowledge and uses the concept of absorptive capacity. The responses of large pharmaceutical firms to biotechnological change are used to illustrate the areas under investigation. The theoretical framework is used to explore the responses of Indian pharmaceutical firms to changes in patent law required by that country's accession to the World Trade Organisation (WTO). The cases show that the theoretical framework is comprehensive and useful for exploring firm level knowledge processes within firms from developing countries. However a broader analysis of firm-level learning in developing countries should include an analysis of the institutional environment as this plays an important role in creating environment for firm based learning

Internationalisation Strategies of Indian Pharmaceutical firms

Abstract In last decade a host of new multinational enterprises have risen from developing countries such as India and China. These new MNEs are dominating global economy and challenging existing paradigms of international business literature. In this context this paper tries to explore whether internationalisation of firms from developing countries can be explained in terms of mainstream theories derived mainly from studies of Western multinational corporations or do these cases present new insights in the explanations that have been offered for latecomer multinationals. With this in mind, the present paper explores patterns and motives for internationalisation by Indian pharmaceutical firms. It focuses on internalisation that is directed towards expansion into foreign markets and accessing new technologies. This paper moves beyond study of export from domestic units and investigates different strategies adopted by Indian firms to internationalise their operations. The evidence presented in this paper shows that Indian pharmaceutical firms are internationalising by acquiring small firms as well as setting up their subsidiaries, in order to access resources, move up value chain and enter new markets. The leading Indian pharmaceutical firms show that high-risk strategy of acquisitions and direct foreign entry can yield rich dividends, provided it is backed up with superior technology savoire-faire in the targeted niches. Thus, this study shows how leading developing country firms can become independent players in oligopolistic industries without major technological assets of their own and proves that internationalisation, a strategy hitherto perceived to be the strategic domain uniquely of Western firms (given resource asymmetries) can be deployed by developed country firms as well.