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Egypt’s Position in Technology and Information Led Globalizationfirms through integration, acquisition andstrategic alliances.● The legal factor as manifested in a newlaw for the international trade of technologyin the context of the TRIPS [TradeRelated Intellectual Properties] agreementthat guarantees the protection of innovations.These are usually owned byrich developed countries that sell them topoor developing countries who are in realneed of these types of products.While these three factors apply to technologyat large, they will be discussed in detailthrough a case study of the pharmaceuticalproducts market.Restrictive Globalization inPharmaceuticalsAn investigation of the above-mentionedrestrictive factors affecting the globalizationof technology in the field of pharmaceuticalmanufacturing and trading reveals thefollowing:The Technological Factor.From the purely technological viewpoint, apharmaceutical product goes through thefollowing main phases:1. Research and Development (R&D),which itself consists of three sub-steps:basic research; applied research; andexperimental development. It is estimatedthat the two latter steps absorb 85 percent of the total costs in this industry.This shows their relative importance inthe pharmaceutical industry.2. Pharmaceutical Manufacturing, whichis in turn divided into two steps:a. Manufacturing of pharmaceuticalmaterials, whether from natural orsynthetic sources.b. Pharmaceutical formations, ormanufacturing the preparations intheir various forms (syrup, tablets,capsules, ampoules, etc.) capable ofdealing efficiently with diseases, andto meet the needs of different patientgroups.In relation to these steps there is an-other important dimension in themanufacturing process of pharmaceuticals,namely, the manufacturingof the machines and equipment necessaryto produce the materials andpreparations.3. Post-Manufacturing: the supervision ofmedicines by the competent governmentauthorities, whether through research onthe degree of bioavailability or toxicity,or through experiments with the medicineupon patients over different periods oftime, doses, etc.It is noteworthy that a medicine would takeabout ten years to be placed on the market,starting from R&D, through medicinedesign, extraction of the effective substances,standardization, and clinical experiments,and requires expenditures ranging betweenUS$40 million to US$250 million.However, some would argue that thesefigures are overestimated in order to put offlikely competitors, especially in developingcountries. Nonetheless, this does not denythe fact that a very high level of ‘criticalmass’ is technologically necessary to startin this industry.The Economic FactorThe market structure of pharmaceuticals ischaracterized by the dominance of a fewenormous firms over the whole process ofmedicine manufacturing. In general, internationalizedproduction at the level of multinationalfirms shows a tendency towardsdeepening the oligopolistic trait of the pharmaceuticalindustry. This tendency is expressedby two types of operation: integrationsand acquisitions; and strategicalliances.Mergers and AcquisitionsMerger and acquisition operations representthe driving force of FDI nowadays. Mostinvestments have recently taken the form ofMerger of companies, or the acquisition ofall or some of the shares of a company, orseveral, by a transnational corporation.Merger and acquisition are also among theprincipal features of privatization. Thepharmaceutical and chemical industry wasconsidered in 1999 one of the mostThe market structureof pharmaceuticals ischaracterized by thedominance of a fewenormous firms overthe whole process ofmedicinemanufacturing.Egypt Human Development Report 2000/2001 - 89