Novartis AG’s decision to exit its modest Indian subsidiary signals once again that Big Pharma is still looking to disinvest and nurtures no real ambition to expand its presence in the country. The Swiss drugmaker’s move also contradicts the promise that India’s new trade pacts like the one with the UK and European Free Trade Association (EFTA) would prompt innovator drug companies to rethink their India plans.
The India-EFTA FTA was believed to inspire confidence in companies like Novartis because of the reference therein to “data exclusivity.”” Commerce and Industry Minister Piyush Goyal said a few months ago that India might attract $150 billion in investments if it adopted data exclusivity provisions. It seemed New Delhi was acting on this front: the Central Drugs Standard Control Organisation proposed in a recent discussion to require early applicants of new drugs in the branded generics space to produce their own clinical trial data, rather than rely on dossiers submitted by innovators.
Besides Novartis, many foreign pharma majors have reduced their India exposure in recent months, particularly in the hyper-competitive branded generics segment, to focus on other markets or specialised high-value categories within India (see chart). The share of MNCs in Indian pharmecuiatical market has been on astaedy decline over the years.
Sanofi divested its core pharma portfolio to Indian players like Emcure (cardiac), Encube Ethicals (Soframycin) and Universal NutriScience (nutraceuticals). It is now running only consumers business in India. Last year, DRL acquired the Stugeron portfolio from Janssen Pharmaceutica NV, a subsidiary of Johnson & Johnson. Eli Lilly too gave the distribution and promotion rights for its popular weightloss drug (tirzepatide) to Cipla (in October 2025), which also holds marketing and distribution rights for Eli Lilly’s diabetes products Humalog and Trulicity from a previous agreement.
Shrinking MNC Foothold
“These are some of the major deals. A lot of smaller deals also have taken place over the past 3-4 years. Indian market is challenging for MNCs due to a variety of reasons. As their products go off patent, several branded generics enter the market at affordable prices leading to significant fall in the profitability and revenues. That’s why many of global pharma firms are not profitable in India,” said Sheetal Sapale, vice-president (commercial) at Pharmarack.
Over the past few years, Novartis has been trimming its Indian portfolio to focus more on innovative drugs in areas like cardiovascular, renal, neuroscience, and oncology. Starting January 2026, Novartis AG gave a perpetual license to Cipla for manufacturing and marketing of Galvus brand and its combination products in India. Prior to that, DRL was given exclusive rights to promote and distribute Novartis’ well-established Voveran range, the Calcium range and Methergine in the country.
Indian regulatory regime maintains strict patent laws that prevent “evergreening”, a practice to extend drug monopolies through minor drug modifications.
Intellectual Property Hurdle
The key “public safeguard” provisions in the Patents Act are Section 3(d) and the fully Trade-Related Aspects of Intellectual Property Rights-compliant “compulsory licensing. The Patents Act was amended in 2005 to introduce “product patents” in pharmaceuticals, but the above provsions and data exclusivity continue to undermine the growth of Big Pharma in India.
Section 3(d) restricts (secondary) patents on “known molecules” only if these are proven to have significantly enhanced the efficacy of the relevant medicine.
Policymakers say that this hasn’t come in the way of real improvements on known drugs, while it has many a times frustrated unjustified attempts to secure multiple patents on the same product. A recent case is Indian Patent Office revoking a patent held by Novartis for Vymada, a blockbuster heart failure medicine, citing lack of novelty, insufficient disclosure, and failure to prove enhanced therapeutic efficacy over existing formulations.
“These rules are not in favour of MNCs because they facilitate domestic pharma companies to produce similar drugs at one-fifth or one-tenth of the original drug price. As such, the share of patented drugs is about 5% of of the overall market,” said a pharma analyst.
At present, there are 30 pharma MNCs operating in India with a combined market share of around 14% as on December 2025. “Most foreign pharma companies derive less than 1% of their revenues from India. The stake sale primarily reflects lack of interest in pursuing ot building a branded generic business. Novartis has also spun off its global generic business which was housed under Sandoz,” said Vishal Manchanda, senior VP (institutional research), Systematix Group.
Accoridng to K M Gopakumar, co-convener, Working Group on Access to Mdicines and Treatment, Novartis AG’s move clearly shows that India is not part of pharma MNCs’ bueiness expansion strategies/ “The promose of recent FTAs ws that invetments would come from EFTA and the UK. This development shows that the opposite is happening, even after extracting IP concessions from India,” he said.
To be sure, Novartis will continue its presence in India through Novartis Healthcare (NHPL), a wholly owned subsidiary of the Novartis Group. NHPL operates Novartis Corporate Center in Hyderabad, and R&D teams, which is managing over 300 clinical trial sites across the country to advance innovative medicines.“The Indian market is different from other markets, and MNCs who are able to understand the market and bring innovative products consistently have done well and will continue to do well,” said Anay Shukla, founding partner at Arogya Legal.
Analysts said that the improving standards of domestic pharma firms, who adhere to the strict US FDA norms, have brought them on par with foreign companies on the production aspects. This gives consumers ample options at affordable prices.
In recent years, India has seen some investments in back-end R&D, such as market research and data analytics. The tools of artificial intelligence are expected to rejig the geographical profile of drug R&D.