MNC generic players tap India as cheaper manufacturing lures

Sep 26 2013, 08:23 IST
Comments 0
Pharma MNCs are convinced about India’s potential as an R&D base. Pharma MNCs are convinced about India’s potential as an R&D base.
SummaryBig Pharma is increasingly targeting the fast-growing generic drug markets in India and elsewhere.

Faced with a patent cliff and a drought of new blockbusters, Big Pharma is increasingly targeting the fast-growing generic drug markets in India and elsewhere, buying up robust local manufacturers. While this has hit a regulatory hurdle in India with policymakers sceptical about “brownfield pharma FDI”, a different set of pharma MNCs seem to be silently taking the less controversial route — setting up new manufacturing facilities.

The sharply lower production costs in India compared with the highly-regulated West may prompt these second-rung firms to make India an export base, say analysts. In a way, these companies are true counterparts of Indian drug firms, with similar revenue profiles and characteristic focus on generics rather than discovery drugs.

When Israel’s Nasdaq-listed Teva Pharmaceutical Industries, the world’s largest maker of generic drugs with sales above $10 billion, built an active pharmaceutical ingredient (API) plant in Malanpur, Madhya Pradesh, in 2008, few thought it would herald a trend. Many others seem to have followed in Teva’s footsteps. Illinois-based $4-billion Hospira, carved out of Abbott Laboratories roughly a decade ago, is setting up a generic injectables unit at Visakhapatnam in Andhra Pradesh for $375-450 million.

Hospira spokesperson Dan Rosenberg told FE the company would start producing a range of specialty injectables by end-2014.

The plant is coming up on the land for which Hospira got lease rights as it bought Chennai-based Orchid Chemicals and Pharmaceuticals’ generic injectables business in 2010. Rosenberg said: “Hospira recognised India’s strong manufacturing capabilities and decided to use the land for our manufacturing expansion. India has strong manufacturing capabilities and an experienced and dedicated workforce, and we’re excited about our Vizag plant.”

Of course, many products the foreign generic companies are planning to manufacture here have domestic alternatives, but these facilities may also bring in new varieties of specialty generics for Indian consumers.

Teva’s 72.6-acre facility in Madhya Pradesh was set up in 2008 and is one of its two Indian API plants, the other one being a brownfield project. The drugmaker with $4.92-billion revenues for the quarter ended June 30, is now building a plant at Sanand in Gujarat. The plant, a joint venture between Teva and Procter & Gamble, will manufacture over-the-counter products for domestic and Asia-Pacific markets.

Teva spokesperson Yonatan Beker said the company had bought the land for $13.3 million and that construction would take about two years. “Our comprehensive analysis showed that the Sanand site best aligned with all of

Single Page Format
Ads by Google
Reader´s Comments
| Post a Comment
Please Wait while comments are loading...