see attach ICO Kim Woods

The Rise of India’s Drug Industry

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The Rise of India’s Drug Industry

1. How might (a) U.S. pharmaceutical companies and (b) U.S. consumer benefits from the right of Indian pharmaceutical industry?

The US pharmaceutical companies can benefit from the rise of the Indian pharmaceutical industry since it would open opportunities for over 200 pharmaceutical companies. It would spur competition so that US companies can increase the quality of their drugs leading to higher standards within the pharmaceutical industry. Furthermore, there an agreement that the Indian companies would not sell to their original inventor that implies that the interest of the US companies would be safeguarded (Hill, 2012).

On the other hand, the US consumers also stand a chance of benefiting from the decrease in prices since Indian companies would be forced to sell their products at their lowest possible prices. The production of generic drugs would be a boost to the consumers as they would have increased variety in the industry (Hill, 2012). With increased competition, there would be increased in the quality of drugs leading to better products. The consumers would also benefit from increased innovative products that would be more efficient.

2. What might have lost out as result of the right of the Indian pharmaceutical industry?

The primary losers of the rise of India’s industry would be manufacturers from other countries. Most of the drugs that were produced in the Indian drug industry are patented in the US. As a result, not all companies would follow the patented in the US and hence, they would not follow the due process (Hill, 2012). Therefore, drugs manufactured in other countries would not export their drugs to the US. The distribution of companies would be lost since the drug distribution would allow for lower prices over counter prices in the wider market reached by the Indian drugs.

However, Food and Drug Administration (FDA) does not regulate drugs produced by the Indian firms. In this case, the consumers stand to lose on the quality of drugs as Indian drugs might not be up to standards (Hill, 2012). There would be a loss of jobs in the other Western countries and US since manufacturers are transferring their plants to India.

3. Do the benefits from the trade pharmaceutical sector outweigh the losses?

The overall benefits from the trade with the Indian pharmaceutical sector outweigh the losses if compared. However, the local drug industry would be adversely affected especially in the respective countries (Hill, 2012). The US consumers enjoy a lower cost of living healthily, and the companies lower selling and operating costs in a highly competitive market. Hence, there would be increased the incentive to spend on research and development leading to a higher potential to discover pharmaceutical that saves lives. Using this perspective, the benefits of engagement between the two international markets would outweigh the losses.

4. What international trade (or theories) best explain the rise of the India as a major exporter of a pharmaceutical?

The international trade theory that can explain the rise of Indian drug industry is Porter’s Diamond. The models explain the competitive edge nations have due to the availability of certain factors. India has an abundance of labor and resources and pharma prices, which is expensive in market abroad (Hill, 2012). The IT industry of India is the leading provider of IT services and employs a lot of people. Secondly, the Indian Drug Industry is the leading producer of generic drugs which is produced at low cost with high-quality production.

Reference

Hill, C. (2012). International Business: Competing in the Global Marketplace (10th Ed.). New York, NY, USA: McGraw Hill.