Indian Drugmakers' R&D Spending Rises Despite Slowing Sales

May 20, 2005

Despite a string of poor first quarter results, Indian firms' R&D investment continues unabated, rising 25% year-on-year in the period. This reflects the move into developing ethical pharmaceuticals amid the country's tighter patent regime, but some local observers are wondering whether the spending — and its results — will ever match that of foreign rivals.

Ranbaxy appears to lead the major Indian drug companies in spending 10% of sales on R&D, close to the level of some multinational firms. However, the problem of scale persists: Rival Israeli generics giant Teva spends only 7% of sales on R&D, but this is reportedly equivalent to Ranbaxy's entire annual research spending.