Global generic drug cos descend on India

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Mumbai, March 13: Global generic drug giants such as Teva, Abrika, Watson, Ivax, Hospira and Pliva are likely to rewrite the Indian generic drug story. The representatives of around 25 global generic pharmaceutical companies were in India last week scouting for various alliances, potential mergers and acquisitions (M&A) in the Indian drug market.

Officials close to the developments said that over 400 meetings were held between the representatives of MNCs and Indian companies and around 30 deals are believed to have been clinched already. This was part of the generic drugs conference organised by ABN AMRO Bank in Mumbai.

With nearly $45 billion of drugs expected to go off-patent over the next four years, the Indian generic drug manufacturers are expected to gain in a big way. The US and countries in Europe are moving towards increased generic usage due to the rising cost of healthcare. In the US, the generic drug utilisation rate has moved up steadily since 1984 after the Hatch-Waxman Act was passed. The Act proposed an increased usage of generic drugs.

“Indian drug firms have the capability to make many of these off-patent drugs. The levels of excitement are extraordinary,” said James New, CEO of the US-based Abrika Pharmaceuticals. He added any company that wants to be globally successful will have to work with India.

According to Ivax president (European region) Frank C Condella, many countries are turning to India on account of the low cost. “Acquisitions are always on the cards. While it is difficult to specify the timeframe, it all depends on the right offer and the right price,” he said. ABN AMRO Bank managing director & global head of healthcare and chemicals Ton Gardeniers told FE that it was possible that there would be meaningful deals between companies in the near future.

This trend has already been visible. Last month, Iceland-based pharma company Actavis acquired Bangalore-based Lotus Laboratories, for 20 million euro (about Rs 110 crore). It is learnt that Teva is scouting for a big acquisition in India which will help it in regaining its top position in the global generic pharma market. Teva lost this position after Novartis bought over Hexal in an $8.3 billion deal.