A four layered R&D efficiency scan in the pharmaceutical industry: Evaluating ownership restructuring

Abstract The key rationale of linking restructuring with efficiency deliberates upon the use of resources and skills after such restructuring. The empirical analysis in the present research facilitates in testing four hypotheses- validation of cobb-Douglas production function, absence of technical inefficiency effects, the impact of the explanatory variable, absence of hicks-neutral technical change and absence of technical progress. A second level analysis wherein an explanatory variable viz., research & development and comprehending its impact on efficiency post ownership change is also done. Additionally, the study is deepened by understanding the presence of bias in decision making post ownership change. This research extends to developing patents in the field of medicines which is one of the many dimensions where Indian Pharmaceutical Industry (IPI) needs encouragement. Furthermore, relatively unexplored areas of medicine like complex generics and biosimilars can promote IPI on the international platform due to limited competition and greater margins in this novel field.