Big Deals, Small Worries

In the last three years the global pharma industry has seen a spate of mergers. Among the big names in the business which have combined forces are Glaxo and Wellcome Plc, Hoechst, Marion Merrel Dow of the US and Roussel to form Hoechst Marion Roussel (HMR) and Sandoz with Ciba-Geigy. And, as in the rest of the world, these mergers are changing the face of the Indian pharma industry by throwing up new leaders and creating a band of drug giants with a presence in almost every therapeutic segment.

Globally the mergers have been the result of rising patent expirations, the threat of health care reform and a drought of successful new products. The mergers were also expected to lift the languishing drug stocks by promising fresh capital infusion into marketing and research. In India, coming close on the heels of the country's decision to follow the international line on patent protection, it has meant even greater muscle power for the multinationals.

 

For instance, take the case of the Rs 510 crore Hindustan Ciba-Geigy and the Rs 234 crore Sandoz India. The two are merging to form a Rs 700 crore entity. The merged company will have strong representation in major therapeutic segments like anti-rheumatic, anti-epileptic, anti-TB, anti-allergic, anti-psychotic, seeds and agrochemicals. As the market and industry cope with the changes, let us take a close look at the emerging equations in the Indian drug market.

Playing with more power

Almost every drug multinational has a presence in the Rs 9,500 crore Indian pharma market. And even though today, the Indian drug makers account for almost 60 per cent of the market, analysts predict that this may change.

These global mergers will bolster the multinationals' ability to develop new molecules and invest more into marketing