ndian economy is currently booming. More and more Indian industries and companies are expanding their activities in foreign markets. It is seen that the destination, mode of internationalization and motivations for global expansion are changing. Literature has established the factors that are most influential in deciding the modes of internationalization for Indian pharmaceutical companies. It was considered important to validate the results by evaluating the current scenario and trends for modes of internationalization in the industry. Therefore, a detailed analysis of five leading pharmaceutical companies of India is conducted. These companies have extensive experience in both domestic as well as foreign markets and therefore warranted a detailed study on their approach and experience in various modes of internationalization. This paper lays out the detailed internationalization efforts of top 5 Indian pharmaceutical companies. These companies were ranked based on their revenue . Top 5 companies by revenue were selected from the big size category. These companies are Sun Pharma, Dr. Reddy's laboratories, Cipla, Lupin and Aurobindo Pharmaceuticals. This category is the most active in internationalization efforts and have gone through multiple modes of internationalization in their evolution. Complete history of the companies is studied to understand the reasons for various modes of internationalization decisions during different stages of the company's life. Table 1 below details out some general characteristics of these companies. Aurobindo Pharma became a public company in 1992 and listed its shares in the Indian stock exchanges in 1995. It has a presence in key therapeutic segments such as neurosciences, cardiovascular, antiretrovirals, anti -diabetics, gastroenterology and cephalosporin, among others.

The company entered the specialty generic formulations segment through cost effective manufacturing capabilities. Today, after a decade or so, it has evolved into a global company manufacturing API's and formulation products based on its innovation capabilities. Aurobindo's R&D capabilities has resulted in filing of multiple patents, Drug Master Files (DMFs), Abbreviated New Drug Applications (ANDAs) and formulation dossiers across the world. In fact, AurobindoPharma is among the largest filers of DMFs and ANDAs from India.

Aurobindo exports to over 125 countries across the globe. Around 70% of its revenues are derived out of international operations. It's manufacturing units have been approved by leading regulatory agencies such as USFDA, EU GMP, UK MHRA, South Africa-MCC, Health Canada and Brazil ANVISA.

Aurobindo Pharma Ltd. has evolved into a knowledge driven, R & D focused company, with its manufacturing and marketing infrastructure spread across many countries. Aurobindo has invested significant resources in regulated markets by designing five of its units for APIs and five units for Finished Dosages. These units are approved by US FDA, UKMHRA, WHO, MCC-SA, ANVISA-Brazil, and TGI-Australia. Aurobindo has a robust product portfolio of over 400 generic specialties.

Aurobindo has been very active in the international pharmaceutical space. Aurobindo started internationalizing in the 1990's by setting up subsidiaries in various countries. This was followed by doing strategic acquisitions in 2000's to enhance company's product portfolio and access new markets. Table 2.2 below details the international operations of Aurobindo. Aurobindo Pharma concluded a strategic deal to acquire Italian operations of Germany based TAD Pharmaceuticals in 2007. This acquisition gave Aurobindo access to more than 70 ready to market products. This strategic acquisition is expected to jump start the business for Aurobindo in Italy where the market and the regulatory procedures are considered as the one of the toughest in all EU. Aurobindo also acquired high profile OTC brands -Mapooro and Carmiooro from TAD as a part of this deal. This was company's third acquisition in Europe, after acquiring Milpharm Ltd in UK and Pharmac in International B.V., in Netherlands. The Company believes that such acquisitions reduce the time to market and enhance the relationships in the generic value chain in addition to building a broad and formidable product portfolio. To conclude it can be said that Aurobindo-Pharma has identified international operations as a major part of its growth strategy. It has been gradually expanding its global network of marketing and manufacturing operations. Geographically, its focus has been majorly on China, Brazil, Japan, Netherlands, South Africa, Thailand, UK, USA and Russia. It can be said that subsidiary has been its most preferred modes of internationalization. Aurobindo is today well positioned to surmount any further challenge in international expansion.

Cipla is a global pharmaceutical company. It is one of the oldest pharmaceutical companies in India and is present in more than 170 countries across the world. The list of countries includes the U.S., Canada and countries in Europe, Africa, Australia, Latin America and the Middle East. Cipla's research and development focuses on developing innovative products and drug delivery systems. It has been responsible for creating multiple new products that are accepted in India as well as globally. Despite the tightly regulated environment of foreign countries, Cipla today has more than 30 manufacturing facilities across India that have been approved by major international regulatory agencies including US FDA, MHRA-UK, WHO, Department of Health-Canada, MCC -South Africa, ANVISA -Brazil, and PMDA -Japan.

The company engages in R&D and also offers technical consultancy services. CIPLA's R&D focuses on innovation, both product and process, that result in cost and time saving. CIPLA has gained expertise in producing generics of very complex molecules. The company has given many generic solutions to India and to the world.

The core of Cipla's international business is strategic alliances for product development, registration and distribution of the products. Its international business continues to be a major revenue driver for the company. Their overseas sales represent 53% of the total income. Cipla continues to expand and modernize its manufacturing and Research & Development facilities. Table 7 As part of their growth strategy, Cipla acquired Celeris in 2013. It is a pharmaceutical distribution company based out of Croatia and was recently renamed as Cipla Croatia.

In July 2014 Cipla signed an exclusive partnership with BioQuiddity (Europe based company) to market One Dose Ready fusORTM (a drug used in regional anesthetic applications for post-surgical pain management). Cipla also entered into an alliance with Serum Institute of India to launch vaccines in Europe.

Currently, CIPLA is one of the world's largest generic pharmaceutical companies with its products sold in over 180 countries. So far, the main mode of international business is exports of formulations, Pharmaceutical ingredients, prescription and over-thecounter drugs, and veterinary products. However, going forward CIPLA is looking to make a shift in its business model.

Cipla is the oldest company amongst its Indian peers. It did not realize the benefit of mergers, acquisitions soon enough and so got left behind a little but is now catching up fast. Just like its peers in Top pharmaceutical companies of India, and as can be seen in Apart from Medpro's acquisition, CIPLA did not grow inorganically through mergers and acquisitions. The company has always expanded organically. Further, except Medpro, CIPLA's physical expansion always took place within India. This may be because any expansion outside India might have made CIPLA vulnerable for legal suites for the previous breach of intellectual property rights.

Therefore, while operating from India, CIPLA conducted its international business through indirect exports. However, the company hopes that it will not face too many challenges when it moves abroad in the near future because it has partners across the globe to help with whom it has long standing relationships. Company is planning to undertake foreign direct investment for expansion in near future. The expansion is most likely to be a forward expansion as the company aims to build marketing and sales network in abroad.

Dr. Reddy's Laboratories is an emerging global pharmaceutical company. It has three core businesses: Pharmaceutical Services and Active Ingredients, comprising Active Pharmaceuticals and Custom Pharmaceuticals businesses; Global Generics, which includes branded and unbranded generics; and Proprietary Products, which includes New Chemical Entities (NCEs), Differentiated Formulations, and Generic Biopharmaceuticals. Table 4.1 lists out some other basic facts about the company. Dr. Reddy's began as a supplier to Indian drug manufacturers. It soon started exporting to other lessregulated markets. This meant not having to spend time and money on a manufacturing plants or seek approval from a drug licensing body such as the U.S. Food and Drug Administration (FDA). This was a great advantage and helped spur the phenomenal growth of the company.

By the early 1990s, bolstered by the expanded scale and profitability in unregulated markets, the company started focusing on tightly regulated markets. It started getting approvals from drug regulators for their formulations and bulk drug manufacturing plants in more-developed economies. This allowed their movement into regulated markets such as the US and Europe.

In 2001 Reddy's completed its US initial public offering of $132.8 million American Depositary Receipts (ADR) issue and also listed on the New York Stock exchange. Funds raised from the US initial public offering helped Reddy's move into international production -and take over technology -based companies.

By 2007, Dr. Reddy's had six FDA-plants manufacturing active pharmaceutical ingredients in India. It also had seven FDA-inspected plants making patient-ready medications -five of them in India and two in the UK.

Reddy's also invested heavily in building R&D labs and is the only Indian company to have significant R&D being undertaken overseas. Dr. Reddy's Research Foundation was established in 1992 and dedicated to research in area of new drug discovery. At first, the foundation's drug research strategy revolved around searching for analogues but its changed focus to innovative R&D by hiring new scientists.

Reddy's path into new drug discovery involved targeting specialty generics products in western markets to gain drug discovery abilities. This led Dr. Reddy to adopt aggressive merger & acquisition strategy to explore the international markets. Table 4.2 below lists out the internationalization history of the company. Dr. Reddy was a very early mover into the Russian market, forming a joint venture with the country's biggest pharmaceuticals producer Biomed in 1992. In 1993, Reddy's entered into a joint venture in the Middle East and created two formulation units there and in Russia. Reddy's exported bulk drugs to these formulation units, which then converted them into finished products. In 1994, Reddy's started targeting the US generic market by building state of art manufacturing facility.

By 1997, Reddy's was ready for the next major step. From being an API and bulk drug supplier to regulated markets like the USA and the UK, and a branded formulations supplier in unregulated markets like India and Russia.

In 2000, Dr. Reddy's Research Foundation set up a US lab in Atlanta, dedicated to discovery and design of novel therapeutics Reddy's merged Cheminor Drug Limited (CDL) with primary aim of supplying APIs to the technically demanding markets of North America and Europe. This merger also gave Reddy's entry into value added generics business in the regulated markets of APIs.

In 2001 Reddy's became the first Indian company to launch the generic drug, fluoxetine (a generic version of Eli Lilly and Company's Prozac) with 180-day market exclusivity in the USA. The fluoxetine marketing success was followed by the launch of ibuprofen in US under its own brand name, in January 2003. It was the first step in building Reddy's fully fledged distribution network in the US market.

In March 2002, Dr. Reddy's acquired BMS Laboratories, Beverley, and it is wholly owned subsidiary Meridian Healthcare, for EUR 14.81 million. Recently, Dr. Reddy's entered into an R&D and commercialization agreement with Argenta Discovery Ltd., a private drug development company based in the UK, for the treatment of COPD.

With growing success in the generics market, Reddy's also came to realize the need for developing marketing and distribution capabilities in the USA. The company already had one tie-up with Pharmaceutical Resources, Inc. to market Fluoxentine 40 mg tablets. It also had a tie-up with Par Pharmaceuticals Inc., to produce and market over-the-counter drugs in the U.S. In addition to the United States, Reddy's generics business had established a presence in the UK as well. Reddy's also plans to expand its presence in Canada and South Africa. Its API business had sales in over 60 countries, with the US and India being the most significant revenue contributors. The branded formulations business was active in over 30 countries and Reddy's was a significant player in the Indian and Russian markets. The business planned to significantly increase its presence in China, Brazil and Mexico in the near future.

In 2004, Reddy's acquired Trigenesis Therapeutics Inc.; the US based private dermatology company. This acquisition gave Reddy's access to certain products and proprietary technologies in dermatology segment.

In March 2006, Dr. Reddy's acquired BetapharmArzneimittel GmbH from 3i for EUR 480 million. This is one of the largest-ever foreign acquisitions by an Indian pharmaceutical company.

Dr. Reddy's Labs has been a very aggressive player in the international acquisition space. Its initial success came through exports of generics which continue to be the growth drive to this date. Reddy's successful growth into a fully integrated pharmaceutical company in less than a decade was founded on a successful and targeted program of inorganic growth and investments in process R&D. It had chosen a high risk-high gain strategy to growth by going into direct competition with existing patent holders.

A major challenge for Reddy's is to find ways to de-risk its overall strategy. One way may lie in managing the cash flows from the 'safer' API and formulations businesses. Another way may be to seek out more experienced partners for the R&D business or use acquisitions to boost R&D resources and revenues. It has chosen the global route and went on an acquiring spree.

Lupin is an innovation led transnational pharmaceutical major producing and developing a wide range of branded and generic formulations as well as biotechnology products and APIs globally. The Company is a significant player in the Cardiovascular, Diabetology, Asthma, Pediatrics, CNS, GI, Anti-Infective and NSAID space and holds global leadership positions in the Anti-TB and Cephalosporin segment.

Lupin is one of the largest and fastest growing pharmaceutical companies in India. It is present in more than 70 countries. Lupin has used a mix of international expansion strategies which reflect the need and stage in the growth life cycle of Lupin itself. Table 5.2 below shows the internationalization history of Lupin.

In 2002-03 Lupin had already made inroads into the active pharmaceutical ingredient or API supplies in the US and Europe, but was a fringe player in most other markets.

Lupin Pharmaceuticals, Inc. entered the U.S. generic pharmaceutical market in 2003. Since then company have received more than 75 FDA approvals and have become one of the fastest growing pharmaceutical companies in the US.

Lupin operates a globally integrated network of 11 manufacturing facilities. Their world class facilities are built to manufacture and deliver a wide range of finished products to the US market. USA is the main market fir Lupin's operations. Lupin has experienced a wide degree of transformation. It has started with opening a subsidiary in USA to sell its while the same team is selling some other companies product in the country.

Medicines in Japan have different specifications from other markets. The percentage of residual impurities and the raw material strengths are different from that of US or European requirements and therefore, cannot be clubbed together with those markets. As a result, Lupin revealed the first step in its strategy-a cooperation agreement with a 50-year old local drug firm Kyowa Pharmaceutical to market medicines in Japan. The agreement turned out to be pivotal. While Lupin had to develop and manufacture the medicine, Kyowa was supposed to conduct regulatory testing, obtain approvals and market the drugs in Japan. Two years later, Lupin acquired a majority stake in privately-held Kyowa, and in 2008, turned it into a 100 per cent subsidiary. Kyowa gave Lupin lot of insights into the working of the Japanese generic market. Company added new products in the Kyowa pipeline, and in less than three years, doubled its turnover.

Again, just like its peers in Top pharmaceutical companies of India, and as can be seen in Fig 5 .1 and 5.2 below, the export intensity has been directly correlated with R&D expenses as well as Total Assets.

Lupin started with the organics entry in international market. but with its strengths and capabilities it moved to other non-organic modes of expansion as well.

Thus, it can be said that Lupin is set to emerge as a transnational enterprise from a purely Indian operation leveraging its ownership resources of low cost manufacturing and acquired R&D capabilities, tuning its strategies to enter markets with best location advantages and using its core competencies to internalize key functions and actually magnetizing these strategic assets.

Sun Pharma is a global, integrated, specialty pharmaceutical company. It manufactures and markets a large basket of pharmaceutical formulations in India, US and several other markets across the world. In India, the company manufactures products in niche therapy areas of psychiatry, neurology, cardiology, diabetology, gastroenterology, orthopedics and ophthalmology. Several regulatory agencies, including FDA-USA, EMA-Europe, MHRA-UK, MCC-South Africa, TGA-Australia, ANVISA-Brazil, WHO-Geneva, BfArM-Germany, KFDA-Korea and PMDA-Japan, have certified their facilities.

Their track-record of successful collaborations includes various in and out licensing of products and technologies, joint ventures, as well as mergers & acquisitions.

Their early investments in R&D began three decades ago. It enabled the company to make technology as their key differentiator and develop a basket of robust products for diverse markets across the world. The company have around 1800 research scientists working in multiple R&D centers. Their scientists have expertise in developing generics, Active Pharmaceutical Ingredients (APIs), Novel Drug Delivery Systems (NDDS) and New Chemical Entities (NCEs).

Sun pharmaceutical started exporting products to neighboring countries of India in 1989. Table 6 Then in 1991, fall in bulk drug prices was a setback for the company. It realized the mistake of depending on a single product line so it started to diversify across multiple formulations. Russia became the biggest export market for Sun but the 1998 collapse of the Russian economy came as a big jolt for the company. Sun has become too focused on Russia as country and lost a big chunk of business due to the political upheaval. That's when Sun decided to focus on three key therapeutic areas by employing similar production technology. This allowed Sun to serve different market segments while using the same technology and thereby allowing them access to the best of both worlds.

In 1997, Sun did its first international acquisition. The main purpose of the acquisition was to acquire the technology. As a result, Sun acquired many companies with equity stake. MJ Pharma, TDPL were few of them. Apart from acquisition as a mode of internationalization Sun also focused on exports. In 1997, Sun reported the exports as 18 percent of their total sales. Although Sun was present in many regulated and unregulated markets, USA still remained the single most important country.

In 2004 Sun Pharma bought a few exclusive brands to consolidate its positions as a leader in the segment. The brands were purchased from the US based company Women's First Healthcare (WFHC). Acquisition of WFHC was the foundation stone for entering the branded generic space in the US at a reasonable cost. In same year Sun Pharma increased its stake in Coraco to over 60% from 44% by acquiring a common stock and options from 2 large shareholders of Caraco.

In There is intense competition from API manufacturers in many other developing countries. Therefore, the company is trying to diversify its product offerings by targeting specialty API. The company's acquisition of Knoll's bulk drug facility and its purchase of controlling stakes in Gujarat Pharma, MJ Pharma, and Caraco (U.S.) provide Sun with additional R&D capabilities and access to U.S. FDA approved factories.

As can be seen in Fig 6 .1, increase in R&D had a positive impact on export intensity of the company. After the thorough analysis it can always be said that Sun Pharma is internationalizing with a high pace, but still challenges are on the way. Sun is taking corrective measures to eliminate the threat of increased patent protection. It is investing heavily in sales and marketing capacities and plans to implement its branded generic strategy in multiple markets.

The first step in internationalization for a small company is always exports. This would mainly be achieved by entering into an agreement with another company in that country. The guiding factor behind it is the philosophy of the company to count on quality. The small company prefers in investing in quality rather than marketing and distribution. Moreover, to encourage the exports they get various incentives from Indian government in form of duty drawbacks, duty free imports of raw materials etc. So it is not only the enthusiasm of the entrepreneur, but also the encouragement on behalf of government that leads to internationalization. As is evident from the table above that regulatory framework, R & D and Market Size have been some of the factors that have influenced the modes of internationalization decisions for these companies. Fig. 7.2 below further shows the R&D expenses at these 5 pharmaceutical firms. Mergers & Acquisitions are generally followed by larger companies. The guiding objective is either to enter a new market quickly or gain a dominant position in an existing market. Through acquisitions, company generally looks for market expansion and operational efficiency. Perhaps it can be said that mergers and acquisitions are generally guide by an objective of resource seeking. In the global world we live in today, there is cut throat competition at every level and it becomes imperative for firms to go for continuous product expansion and market expansion. This product and market expansion is achieved through mergers and acquisitions.

Subsidiary route or establishing a manufacturing plant in the foreign country is followed by even fewer and largest companies as it is the most cost and time intensive approach. Setting up a new unit takes time as it requires getting all the approvals from local authorities.

Acquisition has emerged as a dominant strategy for internationalization in Europe compared to the US and developing countries. Indian companies are acquiring firms in Europe in order to gain experience in regulatory skills. Use of generics in European market is growing quickly due to government's price controls and

Dr. Reddy has once again been a leader in R & D activities over the years. In fact, as stated in the case study for Dr. Reddy, the company has always looked to augment its R & D capabilities through active mergers and acquisitions. other regulations. DRL's acquisition of Betapharm provides the company with access to that market. DRL's strength in the product segment combines with Betapharm's front-end presence and thus enhancing DRL's domestic manufacturing advantage. Another factor aiding acquisition in Europe is the wider range of companies available compared to US where acquisition is more expensive and risky for Indian companies.

To conclude, the changes in US regulations and liberalization of Indian economy have played a key role in aiding Indian firms internationalization strategies. Thus findings of the primary study support the argument that changes in world economy and its interlinked character is responsible for driving the new approaches and patterns of internationalization.

Moreover, the leading Indian pharmaceutical firms show that strategy of acquisitions and direct foreign entry can result in higher profits as long as it is supplemented with superior technology. The insights from the primary study suggest that the motive behind overseas expansion of Indian firms is the need to improve global competitiveness and acquisition of assets including research.

US remains the most attractive market for companies taking the export mode. Given the cost difference between India and US in terms of manufacturing, it is highly beneficial for a company to manufacture in India and export to developed nations.US remains the toughest market to enter too. Getting approval from US FDA opens the floodgates for the company to export its products to multiple countries across the world. But getting US FDA approval requires lot of time and money investment as the requirements for approval are very stringent. The second largest Pharma market in the world is Japan. Japan is supposed to be the most difficult Pharma markets to access. However, Lupin's success in establishing significant presence in Japan shows that building a footprint in this market is not impossible. Indian companies are also look at establishing their foothold in other managed but less regulated markets such as South East Asia and Africa. Liaisons in these developing markets can be facilitated more efficiently by collaborating with international agencies or via government intervention.

After the thorough analysis of the pharmaceutical companies and pharmaceutical industry of India it is found that Indian Pharmaceutical companies are capitalizing on export opportunities in regulated as well as semi regulated markets. Changes in the global arena in terms of increasing healthcare cost have been able to create space and opportunities for Indian pharmaceutical players. Further change in regulatory as well as business perspective is pushing the companies to adapt and change their business strategies. As a result, companies are trying to tap newer markets for their expansion. Company size remains a big factor in determination of modes of internationalization. Size determines the financial and operational capabilities of the company. which further enables the company to take the decision of being risk averse or risk taker.