R&D capability and alliance formation in the pharmaceutical industry in India

This paper looks into the nature of alliances in the Indian pharmaceutical industry, which is developing fast internally and externally. A sample of 33 companies (significant in terms of size and R&D activity) included pharmaceutical firms using chemical-based methods of production, diversified firms based on chemical methods and biotechnology, and those which are doing biotechnology exclusively. The majority of linkages in the pharmaceutical industry are through sponsored research and alliances with universities, which is quite common in the early stages of innovation. In India, linked companies have relatively higher R&D intensity, work in more risky R&D propositions, and more basic serious R&D in biotechnology and related areas. The Indian companies use the linkages to take care of their skill deficiencies and facilities to take up R&D in new areas and also to upgrade their skills. Companies in advanced countries use alliances to complement their capabilities and to reduce risks and costs.