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Core Competency & Competitive Advantage Case Study

Case Title:

CIPLA: Generic Competence

Publication Year : 2004

Authors: G Srikanth

Industry: Health Care


Case Code: CCA0004

Teaching Note: Not Available

Structured Assignment: Not Available

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Thanks to the Indian Patents Act 1970, Indian pharmaceutical companies became adept at reverse engineering. Minimal expenditure on R&D, low labour costs and low input costs due to availability of cheap indigenous raw materials contributed to lower production costs. These factors contributed to the Indian pharma industry becoming 'generics' driven. The growing problem of AIDS across the world, especially in poor countries of Africa, called for an urgent need of producing affordable drugs to combat the disease. Chemical Industrial and Pharmaceutical Laboratories (CIPLA), the third largest pharmaceutical company in India and one of the leading generics producers, offered to supply certain AIDS drugs to these countries, at about a tenth of the price offered by multinationals. This move by CIPLA sent the big pharma players across the world scurrying to lower their prices and to stop generic versions of their drugs being sold.

Pedagogical Objectives:

  • To discuss the factors that made Indian Pharmaceutical industry generic driven
  • To discuss how CIPLA utilized Indian Patents Act 1970 to offer drugs at lower prices and thereby challenging the big pharma companies of the world

Keywords : Chemical Industrial and Pharmaceutical Laboratories; CIPLA; Generic drugs and patented drugs; Medecins Sans Frontieres; World Health Organisation; Core Competency & Competitive Advantage Case Study; World Trade Organisation; Yusuf Hamied; Indian Patents Act 1970; General Agreement on Trade and Tariffs (GATT); Abbreviated new drug application; Zidovudine; Product patents and process patents; Doctors Without Borders; Pharmaceutical value chain; European Commission

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