Ranbaxy Aftershocks - Indian Drug Makers Is Up For Grabs
By www.menhealthonline.biz
Pharmaceutical powerhouse of Japan Daiichi Sankyo's acquisition of Ranbaxy Laboratories, India's largest drug company is likely to have a domino effect on mergers and acquisitions of Indian pharmaceutical companies. The business model which brought mega bucks to the kitty of Ranbaxy would influence other firms in the industry to follow suit.
Ranbaxy is one of the few Indian firms that have made a global footprint in generic drugs. Yet their decision to give up the controlling stake to another multi-national company indicates doing business in India with existing norms is tough and less lucrative. Although India manufactured drugs at roughly eighth of global cost, the Indian government persistently moved with policies to control the prices. Some industry experts averred, the price controls to a certain extent has made Indian pharmacy business less attractive.
On the contrary, Hasit Joshipura, Managing Director of GlaxoSmithKline opined, the Mylan-Matrix deal and now Ranbaxy deal confirm that global pharmacy companies are looking at India from another angle per se, recognizing the country as a key pharmacy destination. The global pharmacy players would be keen on investing in India either by setting up their fully-owned entities, or by deals of strategic alliances or acquisitions.
India has become more attractive in the eyes of big pharmacy companies in the world owing to India's ability to manufacture drugs at very low cost and availability of quality English speaking scientific personnel with required skills. Whereas, pharmacy majors have to live up with rising manufacturing cost at home which has forced them to seek other viable locations such as India for maintaining momentum in their businesses.
Vice Chairman and Managing Director of Novartis India Ranjit Shahani stated Indian generic players with established global businesses had definitely been a target for multi-national
