A comparative study of R&D investments by Indian and Multi National pharmaceutical Companies (with Special Reference to Dr. Reddy'S Laboratory Ltd. & Pfizer Inc.)

Abstract

All the pharmaceutical companies on the globe are working towards creating niche and complex products through investments in R&D. “Indian pharmaceutical companies are always investing a very low amount of their revenue in the R&D work.” Is this statement a myth or a fact? The main aim of this study is to search answer to this relevant question, which directly linked with the growth and survival of the Indian pharmaceutical industry. With the help of revenue and expenditure data of Indian and multinational pharmaceutical companies, this study is an attempt to find an appropriate answer to this question. With special reference to Dr. Reddy's Laboratory Ltd. (a leading Indian pharmaceutical company) and Pfizer Inc. (US based, leading multinational pharmaceutical company), this study also tries to find out the variation of the R&D expenditure made by Indian pharmaceutical companies and multinational pharmaceutical companies. By application of Ratio Analysis, CAGR, T-Test and F-Test this study focuses on analysis of R&D spending of Indian and multinational pharmaceutical companies and to also find out major factors responsible for variation to reach at any conclusion.