A big pharma deal for India

Posted by: Bruce Einhorn on August 28, 2006

Further confirmation that India is becoming a key player in the global pharmaceutical industry: American generic drugmaker Mylan Laboratories today announced a deal worth up to $736 million to acquire control of an Indian company called Matrix Laboratories. The deal comes at the same time that Indian drugmakers like Ranbaxy and Dr. Reddy’s are expanding globally, acquiring companies in the West. And foreign companies are moving to India. For instance, Mylan rival Teva, the Israeli company that is the world’s No. 1 maker of generics, acquired an Indian drugmaker in 2003 and has hired a former Ranbaxy exec as an advisor. Sandoz, the generics division of Novartis, has over 1,000 employees in India working in R&D and manufacturing.

By now the Indian formula for pharma success is familiar: Combine a low-cost manufacturing base with a deep pool of talented workers and globally savvy managers. According to KPMG (see here for a summary), India graduates 700,000 scientists and engineers annually. The cost of manufacturing medicine in India is half that of countries in the West.
Bigger players like Ranbaxy and Dr. Reddy’s showed the way, marketing generics in the U.S. and elsewhere, and now second-tier companies like Matrix have followed. Indian pharma company Wockhardt the latest to be shopping overseas. According to The Times of India,the drugmaker is looking to acquire an Irish pharmaceutical company, Pinewood Laboratories.
Meanwhile, foreign companies like Israel’s Teva, the world’s biggest generics maker, have been moving to acquire sta I’ve taken a bit of a beating from some fans of India lately who have argued that I favor China. But when it comes to the pharma industry, India’s companies definitely have the edge.

Reader Comments

Archit Mishra

January 17, 2007 5:03 AM

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Bloomberg Businessweek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies.

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