GSK eyes acquisitions worth $2 bn in India

Global pharma giant GlaxoSmithKline is eyeing acquisitions worth $2 billion in India, the world's fastest-growing drug market, media reports said.

"India is clearly on the radar. We plan to spend between $500 million and $2 billion. I would love to buy something in India," GSK Chief Executive Andrew Witty told 'The Times' during his visit to Mumbai.

GSK, which employs 5,000 people and has turnover of more than $1 billion in India, was, however, unlikely to pursue large-scale merger and acquisitions, and was unwilling to overpay for companies, the report said.

"We already have an enviable brand in India so there is no need for us to pay a strategic premium," he said.

"Others might need to do that, but we don't."

Witty received plaudits in 2009 for slashing the price of medicines that GSK sold in the developing world and, most radically, for offering to share knowledge about some of its potential drugs that are protected by patents.

Overall, GSK's drug sales in emerging markets grew by 22% last year to 3.6 billion pounds, while profits swelled by nearly a third.

India's pharmaceuticals market is worth 5.8 billion pounds a year, making it the eighth largest in the world.

Between 2010 and 2015 it is expected to grow by 15.7% a year as newly affluent Indians spend more on healthcare, boosted by annual GDP growth of nearly 8%.

The Indian government has also pledged to raise its overall spending on healthcare, which stands at only 1.2% of GDP, making it among the lowest in the world.

His comments come amid India's Industry Ministry seeking the Prime Minister's intervention in regulating FDI into pharmaceutical companies, as it is concerned over a large number of acquisitions of Indian drug firms by MNCs.

The ministry fears that a spate of acquisitions by MNCs would create "an oligopolistic market with large companies working as a cartel".

The Health Ministry has also suggested that the FDI be capped at 49% in the pharmaceutical sector, fearing that acquisitions would increase the prices of generic drugs.

At present, 100% foreign direct investment (FDI) through automatic route is allowed in the pharma industry.