Investment Risk Identification and Its Assessment: A Study of Indian Pharmaceutical Sector

Abstract

The pharmaceutical industry is undergoing rapid transformation, as the pharmacy companies are facing pressure from governments and public for reduction in prices of life-saving drugs and initiating outcome-based pricing. Indias pharmaceutical industry has been growing at record levels from past ten years. Even though the sector has a very huge potential to grow, from last couple of years it is facing major loss as there is a dip in investments due to sector specific risks as legal, safety, market to name a few. This industrys deep-rooted position as a global leader in the production of high-quality generic medicines is set to harvest significant new benefits as the patents on a number of blockbuster’s drugs are about to expire over the next few years. Safety, policy, regulatory, contingency planning, various investment risks identified in this paper which are involved in the pharmaceutical, lead to fall in investments. The severity impact of all above identified investment risks on investment is analysed using factor analysis. Most influential risks are enumerated and simultaneously presented using graphical method as tornado chart.

Keywords: Pharmacy Sector, Risk Identification, Impact Assessment, Risk Mitigation

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