The Technical Efficiency of the Pharmaceutical Industry in India: A Firm Level Analysis

This paper analyses the technical efficiency of Indian pharmaceutical industry using data envelopment analysis (DEA) for the period of 1997–2011 which covers both post TRIPS and post product patent period. The study finds that prior to 2005 (during process patent regime) the sector has witnessed a gradual fall in its efficiency level and after 2005 i.e. the post product patent regime, the industry is witnessing an increasing trend in the level of efficiency of all the firms on an average. Our study also indicates that the industry has experienced rapid pace of technological growth opening up new production possibilities. However, most of the firms have failed to appropriate the benefits of such technological change. The study also finds that installing capital-intensive techniques or imported technology has been a good strategy to accelerate the technological growth of firms.