Influence of research and development (R&D) cost on profitability: A study of indian pharmaceutical sector

The Indian Pharmaceutical Industry (IPI) is the world's second-largest industry by volume and is likely to lead the manufacturing sector of India. It meets around 70% of the domestic demand for bulk drugs, drug intermediates, and pharmaceutical formulations. But till now public attention in this country has been focused so much on the profitability and liquidity of corporate finances. Furthermore, no studies were made on Pharmaceutical industry in connection with examining the relationships between R&D cost and profitability. Keeping above facts in view, this research work focuses on various R&D activities and business strategies adopted by Indian pharma industry to sustain business in terms of profitability. This study will be beneficial to companies as it brings out the effect of investment in R&D on these key company performance indicators. This can be a valuable tool for companies in making decisions regarding allocation of investment funds.