The core points are:
• Emerging countries still on the whole have many firms manufacturing pharmaceuticals. Most of them are small/medium sized enterprises, survive entirely through the production of products which were patented in earlier years, have quite fragile financial structures, and compete quite strongly among themselves (i.e. within each country).
• State owned enterprises still operate in some emerging countries, but their influence is limited compared with the position occupied by state-run manufacturing firms in other industrial sectors.
• There is still very little R&D carried out in emerging countries. That which does take place often does not reach a «critical mass» sufficient to hold out the promise of results.
• Though the innovative pharmaceutical firms in these markets may be few in number, their market share tends to be substantial.
As noted earlier, foreign direct investment in emerging countries is not showing an expansionist tendency. The factors which stimulated it in the past (local content regulations; rules forbidding imports, or posing severe obstacles to them; measures limiting markets to generics) are precisely those whose weight has been significantly weakened by the new economic environment. There are only two things which might encourage foreign direct investment in the future. First, if really important savings in production costs were to exist which could attract foreign direct investment to emerging countries. This does not seem likely. R&D requires not only major investments, but also a «culture» which cannot be developed quickly. Even if there strong financial incentives were introduced, it is hard to imagine that a relocation of R&D based activities towards emerging countries could occur in the short or medium term. Second, the necessity of having a foothold in fresh markets, especially some of those in Asia. A few instances may be cited, such as the notable establishment of French innovative pharmaceutical firms in Vietnam, and the wave of joint ventures in China. Perhaps under the same outlook we could include foreign direct investment by individual firms seeking to consolidate sub-regional manufacturing/R&D bases (c/f Glaxo in Singapore). All the same, the global effect of such events does not seem likely to be the precursor of any appreciable shifts in industry structure.