Looking healthier on booster dose of global alliances, the Indian pharma and healthcare sectors repeatedly hit headlines this year on account of M&As, but inbound buyouts by MNCs raised concerns over availability of low-cost drugs.
Be it Sun Pharma's victory in acquiring Israel's Taro after a long drawn battle, or Piramal's selling off its domestic formulations business to Abbott, or Biocon's marketing deal with Pfizer, Indian drug makers sought strength from global play.
In the healthcare arena, too, not to be dis-heartened by the step down in the battle for Parkway, Fortis bought Hong Kong's Quality Healthcare Asia to expand beyond borders.
These may well be steps towards the bigger role Indian pharma and healthcare seek globally in the coming years, but there were concerns as well on Indian pharma's selling off to MNCs with deep pockets and strong network of R&D.
Worried over big Indian pharma firms getting acquired by MNCs, the Department of Industrial Policy and Promotion (DIPP) came up with a discussion paper suggesting restrictions on foreign direct investment in the sector.
Besides, worried over the impact of Indian firms' acquisition on the availability of low-cost medicines, the government has decided to examine the possibility of "Compulsory Licensing" under which a third party -- other than the patent holder -- is allowed to produce and market a patented product or process.
Besides, in a bid to boost local innovation, the government came up with plans to set up a Rs 2,000 crore venture capital fund to promote drug discovery and strengthen infrastructure in the pharma sector.
That apart, Indian firms' skirmishes with authorities in European Union and in other parts of the world over seizure of their export consignments remained strong irritants through the year. Finally, this week, the issue has been resolved with the EU.
The two sectors continued to grow strongly and are set to touch the $280 billion mark by 2020, said FICCI Director Bishakha Bhattacharya.
Mckinsey and Co, on the other hand, predicted that growing at compounded annual growth rate of nearly 14 per cent in the next few years, the Indian pharmaceutical market is expected to touch $40 billion by 2015.
The domestic market, which is growing at about 14 per cent, will be $20-24 billion in 2015. Exports and contract manufacturing business, which are growing at 10 per cent per annum, will contribute to achieve the predicted growth.
Currently, the total industry size is about $20 billion, with exports accounting for about $9 billion.
The unrelenting ambition of domestic firms to expand globally was seen in Sun Pharma's finally wresting control of Israel's Taro Pharmaceuticals after over three years of hard fought takeover battle.
Besides, it was also evident in Fortis' pursuit to take the control of Singapore-based hospital chain Parkway, before giving up the race to Malaysia's Khazanah, and turning its interest to acquire Hong Kong's Quality Healthcare Asia Ltd for an aggregate consideration of around Rs 882 crore.
At the same time, MNCs found right partners in Indian firms and went on to acquire part of their business, signalling the sector's increasing importance globally.
Biocon's $350 million (Rs 1,550 crore) deal with the US-based drug major Pfizer for marketing of insulin products of the Bangalore-headquartered biotech major was another highlight of the year.
The biggest pharma MNC move of the year was US major Abbott's acquisition of Piramal Healthcare's solutions (domestic formulations) business for US 3.72 billion (about Rs 18,000 crore) to become the largest drug maker in India.
It however reignited concerns over the takeover of Indian pharma firms by MNCs -- a debate already smoldering after Ranbaxy's buyout by Japan's Daiichi in 2008.
Meanwhile, the Gurgaon-based firm also contributed to India's expansion globally by announcing the opening of its new $30 million (nearly Rs 140 crore) manufacturing facility in South Africa, its second plant there.
Besides hectic activity on the mergers and acquisitions front, the Indian pharma firms had to face hostility from European Union authorities seizing generic drug bound for Africa for alleged patent violations.
The issue became a major bone of contention between India and the EU and the issue was finally resolved this week.
The sector also benefited from sops given in this year's Budget to give a fillip to the R&D sector. Finance Minister Pranab Mukherjee proposed a weighted tax deduction on expenditure incurred on in-house R&D activities to 200 per cent from 150 per cent in the Budget.
Expectedly, the move was welcomed by the industry.
"Research and development activities are a must in the pharma sector, where it (the incentives) is most urgently required," Indian Drug Manufacturers Association Executive Director Gajanan Wakankar said.
On the acquisitions front, the year began with Fortis Healthcare acquiring 23.9 per cent stake in Singapore-based healthcare firm Parkway Holdings for about $685.3 million (nearly Rs 3,100 crore) in March.
The move by the Indian firm, to establish a pan-Asian presence was fiercely competed by Malasia's sovereign fund Khazanah. After months of battle, it finally withdrew from the race in July agreeing to sell its entire stake in Parkway, after Khazanah took control of the hospital, for about $2.5 billion.
Although the Parkway deal would have enabled Fortis to establish a Pan-Asian presence and increase its network to 62 hospitals with combined bed strength of over 10,000, Fortis Healthcare Chairman Malvinder Singh said the company was never interested in a bidding war.
"We think at some point of time it was not economically viable... We have taken into account what is best for every shareholder of Fortis," he said.
Later, it turned to Quality Healthcare and acquired its businesses for about Rs 882 crore in October.
Meanwhile, Sun Pharma heaved a sigh of relief as it took control of Taro after nearly four years of legal wrangling.
The Mumbai-based firm had signed a $454 million merger deal with Taro in 2007, which was terminated a year later by the Israeli firm unilaterally. Both the companies filed various legal suits against each other.
After favourable ruling from the Israel Supreme Court, which allowed it to go ahead with an open offer it launched in 2008, Sun went on to acquire a controlling stake in Taro and offered to buy out the promoters of the Tel Aviv-based firm -- the Levitt family's 12 per cent stake for $37 million.
Subsequently, the company Chairman Dilip Shanghvi took over as the chairman of the Tel-Aviv based firm.
Contrary to what Fortis and Sun were doing, in May Piramal Healthcare agreed to sell its domestic formulations business for $3.72 bn (about Rs 18,000 crore) to Abbott thus enabling the US pharma major become the largest drug manufacturer in India.
The American firm termed the move as as a "strategic action" to become the leading player in India that would help it garner seven per cent of the estimated Rs 55,000 crore Indian drug market.
Abbott made upfront payment of $2.12 billion and agreed to pay the remaining amount in four annual instalments of $400 million.
Abbott got Piramal's manufacturing facilities and rights to market over 350 brands in the domestic business. The sale also involved the transfer of over 5,000 employees of the domestic formulation business.
Subsequently, Piramal's Healthcare Solutions business became part of Abbott's newly-created, stand-alone Established Products Division. Under the terms of agreement, Piramal agreed not to engage in generic pharmaceutical business in the country for the next eight years.
For Piramal, it was not the only sell-off this year. It also offloaded its diagnostics unit, Piramal Diagnostic Services Pvt Ltd (PDSL) to Super Religare Laboratories (SRL) for Rs 600 crore, nearly two months after selling its domestic solutions business to Abbott.
Piramal Healthcare received Rs 300 crore on closing of the deal and the balance would be paid over three years.
Another Indian firm Cipla also managed to put its name in the acquisition score-sheet when it acquired domestic pharma company Meditab Specialties for Rs 133.35 crore on the year of its 75th anniversary.
Through the acquisition, Cipla aims at expanding global business of the active pharma ingredients and intermediates.
In October, biotechnology major Biocon entered into the $350 million (Rs 1,550 crore) global deal with Pfizer.
The companies entered into a strategic global agreement for the worldwide commercialisation of Biocon's biosimilar versions of insulin and insulin analog products: recombinant human insulin, glargine, as part and lispro.
In addition, Biocon will receive additional payments linked to Pfizer's sales of its four insulin biosimilar products across global markets.
Pfizer has won exclusive rights to commercialise these products globally, with certain exceptions, including co- exclusive rights for all of the products with Biocon in Germany, India and Malaysia.
Pfizer was to make upfront payments totalling $200 million as part of the deal. Biocon was also eligible to receive additional development and regulatory milestone payments of up to $150 million.
During the year, Biocon also said it will set up a biomanufacturing and R&D facility in Malaysia with an initial investment of $161 million (about Rs 715 crore).
Market watchers believed that Biocon's deal augured well for Indian innovative firms could inspire others to take its lead in future.