With Indian companies expanding their global footprint through acquisitions and partnerships, they are at the tipping point of becoming global MNCs. This was revealed by Sasikanta Mishra, Deputy Director, Confederation of Indian Industry in an interview to a reputed national daily newspaper

On the options Indian pharmaceutical companies have and the challenges they may face in future Mr Mishra said, "Indian pharma companies have gone global. Many Indian companies like Ranbaxy, Dr. Reddy Laboratories, Wockhardt, or Sun Pharma have acquired companies in the USA and some other key European markets. In the year 2005, Indian pharmacos spent $1.6 billion on such buyouts. In 2004, the acquisition-spend was $265 million."

Indian companies that have expanded into the overseas developed markets have done so driven by the generics opportunity. During the last few years, the industry has become exports-oriented with close to 50 percent of the Indian pharma revenue coming from exports. These earning from exports help them further their acquisition plans. However, despite their pursuit of the external geographies, they continue to maintain strong brand portfolios for the domestic market as well. And this shows their maturity level, he further said.

On asked on how he perceived the generics opportunity in the USA, Europe, Mr Mishra said, the global generics market is estimated to be $50 billion, growing at 12 percent CAGR. There is a pressure in the US on the regulator to curb healthcare costs. And this has given rise to a political and legal environment favourable for the growth of generics firms. But today, the generics market looks crowded by Indian players. Thirty five percent of the global DMF filings are carried out by the Indian companies. Such competition has led to a situation where the Indian companies are seen cutting each other on price in the developed markets.

"If the Indian companies manage to acquire exclusivity rights for multiple drugs consistently, then the environment will be a lot more conducive to their survival and growth, overseas."

"In order to reduce the risk in new drug development, Indian companies out-license their molecules under development to such large MNCs that can support their research activities and huge marketing and sales organisations. Small companies don't have the required budget to undertake new drug development which is one of the major thrust for the pharma companies to innovate themselves," he further said.

"Through the out-licensing strategy smaller Indian pharma players can focus on this area by partnering with Global players which have a thrust on R&D and come out with innovative molecules and also have the required market access to emerging Pharma growth markets. Small and mid-cap companies can benefit more from this in a major way as it answers the gap in the product pipeline and product portfolio planning, which is the root cause for growth," he added.

Mr. Rakesh Joshi

Joshi Enterprise

Manager, Joshi Enterprise
Dispur, India

Free Member, Joined :02/02/2007
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