Name: Jaswinder Singh
Country: India

Year: 2024
Volume: Volume-11, Issue-1 (January-June)
Page Number: 25-41

ABSTRACT
The present paper endeavors to analyse the inter-firm variations in technical efficiency of
Indian pharmaceutical industry during the pre-TRIPS and post-TRIPS period. In view of
achieving the above objective, data for thirty major Indian pharmaceutical firms has been
culled out from the various reports of the Centre for Monitoring Indian Economy (CMIE)
over the period 1991 to 2018. The Data Envelopment Analysis (DEA) has been used to
compute the technical efficiency and scale efficiency scores of Indian pharmaceutical firms.
The empirical result reveals that the average inefficiency to the tune of 11.11 percent has
been observed in Indian pharmaceutical industry during the entire study period, whereas it
has been found that the Post-TRIPS period has experienced a set-back as the average OTE
has declined from 90.8 percent during the pre-TRIPS period to 85.2 percent during the postTRIPS. Therefore, during the post-TRIPS period the overall technical inefficiency has
observed to be 14.8 percent. The result shows that the managerial inefficiency (i.e., pure
technical inefficiency) is the dominant source, whereas scale inefficiency is relatively scant
source of technical inefficiency in Indian pharmaceutical industry. It can be inferred that the
TRIPS agreement has observed to be adversely affected the efficiency trends and thus, failed
to exert any positive impact on the efficiency of Indian pharmaceutical industry.
Keywords: Malmquist Productivity Index, Pharmaceutical Industry, TRIPS, Data
Envelopment Analysis