BANGALORE, April 10, 2014 /PRNewswire/ --
Indian Pharma Industry Guns for Acquisitions as a Means to Growth
India's booming $14 billion-a-year pharmaceutical market is clearly on a set growth path and is witnessing a spree of mergers and acquisitions (M&As) over the past few years. And scripting this story are large drug companies that are scouting for acquisitions as a growth avenue for product expansion, competitive advantage, and greater market share. Vendors have been primarily focusing on M&As as a means to increase their global presence and achieve economies of scale at a time when India is faced with a credibility crisis and regulatory hurdles relating to generic drugs. Through consolidation, the Indian pharma industry is set to take on global players despite the tough environment and recent moves to impose price cuts and limit patents on some generic drugs. Access this coverage of India's pharma giants at:
http://wallstanalyst.com/sense-x/market-mantra/1895-sun-pharma-en-route-to-become-market-leader
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FDA Turns the Heat on Indian Generic Drug Makers
In recent years, large generic drugs makers have been acquiring smaller players seeking economies of scale for selling low-cost, commodity products to the developing nations, especially the US. These large generic drug manufacturers have had a good run in the past decade selling copycat versions of blockbuster drugs in the US and other major markets. However, with many copycat versions flooding the market, the US Food and Drug Administration (FDA) cracked the whip by implementing stringent norms for generic drug approvals. This has in turn made it harder for generic drug companies to launch new products and comply with the FDA's manufacturing standards.
Adding to their woes is the dwindling number of patent expirations, which has significantly affected the revenues of generic drug companies. Hence, mergers are seen as one way to improve efficiencies. Analysts estimate that recent deals in the global generic drugs market have led to savings of about 8% of sales. Read our coverage of the challenges faced by drug makers by visiting the following link:
http://wallstanalyst.com/sense-x/market-mantra
Indian Pharma Firms Eye Long-term Growth Prospects with Takeovers
Indian generic drug makers are looking to acquire companies with large FDA-approved manufacturing facilities and a good portfolio of generic products that they can leverage to expand operations in some high-growth emerging markets. Pharma firms are also eyeing companies with a strong supply chain and marketing network in the US and other developed nations. Thus, acquiring such companies would help them gain a firm foothold in some markets that are the hotbeds for generic drugs.
Most importantly, Indian pharma giants are scouting for takeover candidates with strong capabilities in the R&D of generic drugs, especially those that have drugs in late-stage clinical trials or drugs that are pending approval by the FDA. This in turn would give the acquirer a massive advantage in terms of ability to market these drugs in the US after approval and export generics to other countries as well.
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