ABSTRACT
This chapter presents a model of development spurred by national enterprises based on reverse engineering to indicate how selective government intervention can address market failures that often retard industrial development. It shows that it was the design of a coherent long-term strategy of growth under appropriate pharmaceutical policies, as well as the dual initiative of national entrepreneurship and foreign direct investment, that led to the spectacular development of the Indian pharmaceuticals industry. The chapter examines whether in the Indian pharmaceutical industry the pattern of industrial development has followed a reverse engineering and dynamic mode, found in late industrialising countries. It explores the task environment that influences the performance requirements of the two ownership groups within the Indian drugs and pharmaceuticals industry. India’s drug prices were amongst the highest in the world in the 1960s when translational corporations-affiliates commanded over 90 per cent of the Indian market.
