Correspondence: Jayashree Dubey, Institute of Public Enterprise, Osmania University, Hyderabad, Andhra Pradesh 500007, India. E-mail: jayshree@ipeindia.org

¹is the project manager at Integrated Product Development Organization (IPDO), Dr. Reddy's Laboratories, Bachupalli, Hyderabad, India.

²is the assistant professor at Institute of Public Enterprise, Osmania University, Hyderabad, India.

Received 8 April 2009; Revised 8 April 2009; Published online 5 June 2009.

Abstract

The paper discusses the emerging role of product differentiation in the pharmaceutical sector, and evaluates its impact on sustainability of the industry. Secondary data were used to study various differentiation strategies and their effect on market life of certain drug products. The study found that product differentiation is being increasingly employed to sustain the profitability of pharmaceutical companies. New dosage forms, fixed drug combinations and new indications are the most exploited differentiation strategies. Although product differentiation has helped large pharmaceutical companies to replenish their drying product pipeline, it has also immensely benefited drug delivery companies that were, till now, fringe players. The research output helps business strategists in pharmaceutical industry to appreciate the importance of product differentiation, and make it one of their core business strategies.