This is the second of a two-part report on the pharmaceutical industry. Part II begins with a discussion of foreign direct investment and inter-firm networks, which covers international mergers, acquisitions, and minority participation; market shares of foreign-controlled firms; international collaboration agreements (with a special note on agreements in biotechnology); and licensing agreements. The final section of the report covers governmental policies on health and safety regulation, price regulation, industry and technology, trade, foreign investment, protection of intellectual property, and competition.