Author(s)

Yansheng Zang, Dawei Li, Changyong Yang, Qiong Du

May 2011
Abstract

This article studies the characteristics of the global pharmaceutical industry value chain and China’s position in it, using the tools of value chain analysis, the Grubel & Lloyd (GL) index, and an input-output model. Research shows that in the global pharmaceutical value chain, proprietary medicine’s value chain belongs completely to the producer-driven type, and the core added value is mainly from the input of research and development (R&D). Meanwhile, in the nonproprietary medicine value chain, raw medicine is comparatively independent and has a weak relation with the R&D stage. Based on the aforementioned findings, we conduct a concrete study of China’s position in the global pharmaceutical industry value chain. The results of the study show that China now mainly produces nonproprietary medicine and stands at the lowest point of the “smile curve.” Based on this, we calculate the Vertical Specialization (VS) Index, and analyze China’s position in the R&D stage of the world pharmaceutical value chain. We conclude that China’s cheaper labor cost is the main reason why multinational companies move their clinical trials to China.

Tags(s): China Pharmaceuticals Value Chain
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Author(s)

Elisabeth Nesbitt

February 2009
Abstract

The increasing use of industrial biotechnology by the Chinese liquid biofuels and chemical industries is expected to help offset energy security and environmental concerns generated by China’s robust economic growth. The expanding use of bioprocesses to produce products such as fuel ethanol and bioplastics is also likely to contribute to continued innovation, productivity gains, and cost savings. This, combined with strong government promotion of the country’s bio-based economy, coincides with the two industries’ growing global prominence; China is currently the world’s third largest producer of ethanol and second largest producer of chemicals. This growth has encouraged expanded domestic and foreign investment, including in bio-based projects, and generated related gains in exports, particularly in the chemical industry. Market conditions facing many ongoing and prospective ventures, however, are changing as a result of a combination of factors, including the strength of the Chinese currency, new labor regulations, tax changes, and volatile energy prices.

Tags(s): China Innovation Pharmaceuticals
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Author(s)

Katherine Linton, Nicholas Corrado

August 2007
Abstract

India has charted its own intellectual property (IP) path over the last 35 years, attempting to foster the growth of a domestic pharmaceutical industry and access to medicine while, more recently, also addressing the requirements of the international IP regime. Multinational companies (MNCs) have responded to India’s movement towards compliance with the WTO intellectual property agreement, TRIPS, by increasing the quantity and quality of foreign direct investment (FDI) in the areas of pharmaceutical research and development (R&D) and manufacturing. By contrast, MNCs have adopted a more cautious attitude toward the patenting and commercialization of new pharmaceutical products in India, waiting to see how Indian courts and patent offices interpret the new laws, and awaiting the enactment of long debated data protection legislation. The ultimate success of the Indian “calibrated approach” to fostering the domestic industry and access to medicine while also addressing international IP requirements remains to be seen.

Tags(s): India FDI IPR Pharmaceuticals
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