• Adrian Simpson, United States says, "If you are looking for a fair deal on medical supplies, IDM is something I would seriously recommend. Am hooked for life."
  • Craig, United States says, "Seemed easy to purchase, reasonable prices. Good customer service when I used it."
  • Brian Pavey, United States says, "IDM makes online shopping a pleasure. Shopping is so simple that you just breeze through it."
  • Harry Mason, United States says, "I have to admit am a bit of a lazy bloke when it comes to ordering online .And IDM pampers me to the hit as it's so simple to order."
  • John Hanks, United States says, "I was a sceptic until my first order. After, I received my first package, I turned believer. Now, it’s been 3 years since I have been ordering from IDM."
  • Natalie Wallace, United States says, "I was apprehensive about how my doubts would be addressed but what the heck,I went ahead and placed my order. Customer service was patient and helped me out."
  • Mark Penning, United States says, "Happy I got my package just in time for my vacation. Needless to say, it made my holiday a wonderfully satisfying experience."
  • Ask our pharmacist, if you have any questions related to your medications
    Click to find International Shipping charges at our pharmacy.
    Shop & Earn @ InternationalDrugMart
    Easy and secure shopping @ InternationalDrugMart.com.
    Get your instant Coupon now!
    You can find the latest happening of our pharmacy
    Follow us on Twitter

      Mergers and Acquisitions in Pharma

      Posted AtExpress Healthcare Management

      A new report by PWC indicates that global consolidation will continue in the near future, especially in the Asia-Pacific region. Sapna Dogra reports.

      The latest Pharma Insights report from PriceWaterhouseCoopers (PWC) indicates that as pressures on the pharmaceutical industry increase, global consolidation will continue. According to the study, the consolidation will lead to the creation of new 'big biotech' companies in the Asia-Pacific region. The lack of research and development (R&D) productivity, expiring patents, generic competition and high profile product recalls are driving the mergers and acquisition (M&A) activity in the sector.

      In India a number of companies have made M&As in global markets. For the moment, the big pharma companies will be divesting non-core divisions such as Over-the-Counter (OTC), furthering mid-tier consolidation in the European pharmaceutical sector. Timmy S Kandhari, executive director, Financial Advisory Services, PriceWaterhouse-Coopers, suggests the consolidation activity in Europe and Asia will continue next year as well. "In India, it will be driven in the medium term by implementation of the new patent regime and generic companies looking to establish a low-cost base out of the country,"he says. Moreover, it appears Indian companies will continue to look at acquisition opportunities in the regulated market, especially Europe.

      Good opportunities for 'big pharma'

      India's changing therapeutic requirements and more relaxed price control will provide new opportunities for big pharma, indicates the PWC report. India's strong manufacturing base will stand some global companies in good stead as well. An industry analyst at the Confederation of Indian Industry (CII) opines that the domestic pharma companies have forayed into mergers and acquisitions in order to gain access to global markets.

      "The Indian pharma industry is known for generics, cost-effectiveness and competitiveness that give it an edge," says the analyst. The analyst also suggests that the Indian market is huge and the varied nature of diseases in India interests international companies. "We will see more and more acquisitions by the Indian companies especially in the regulated markets of the US and Europe,"he adds.

      The US Food and Drug Administration (USFDA) has already approved 60 manufacturing sites in India. All domestic producers were obliged to comply with Good Manufacturing Practices by January 2005, under Schedule M of the Drugs and Cosmetics Act, 1940. The costs are very competitive too. Goldman Sachs estimates that they are only a fifth of those involved in setting up and running a new manufacturing facility in the West.

      M&A trend will grow

      The key feature of M&A activity in Asia-Pacific has been consolidation of indigenous drug manufacturers, particularly in China and India. JPS Kohli, managing director, Business Horizons, feels that the trend will continue: "There were entry barriers for companies from the developing countries and acquisitions make it easy to find a foothold in those markets. For instance, there was a cultural and language barrier in Europe. The US is a huge market and will always interest the Indian pharma companies for its sheer size."

      The domestic industry is fragmented with over 4,000 manufacturing units. In such a scenario, consolidation is the only answer to survive in the post patent regime, avers Kohli. The PWC Insights points out that more than 10,000 domestic firms collectively control about 70 per cent of the market in India. Only three foreign MNCs rank in the top 10 companies, measured by sales. even they have 11.9 per cent of the market between them. But many of the local players are generic producers specialising in anti-infectives, and as the illnesses of affluence and age increase, so will the demand for innovative new pharmaceuticals.

      Set to take on the global markets

      The number of mergers and acquisitions in the past months shows that the Indian pharma industry is all set to take on the global markets. Nicholas Piramal acquired 17 per cent in Biosyntech, a Canadian pharma packaging company in July 2005. Similarly, in June 2005, Torrent acquired Heumann Pharma, a generic drug company that was earlier a part of Pfizer. Matrix's acquisition of the Belgian firm Docpharma was the largest acquisition deal.

      Sun Pharmaceutical Industries has announced its plan for acquisitions in the US. The company has earmarked $450 million for this purpose. Strides Arcolab in Bangalore has announced its intention to take a 70 per cent stake in an Italian facility worth $10 million (Rs 44 crore).

      According to Dr JM Sehgal, MD, Shelly Pharma Tech, the Indian pharmaceutical industry is on par with the best in the world. Processes in India are cost-effective and moreover, India has a large number of USFDA-approved plants. The growth is steady and more mergers are expected with European and US companies, as manufacturing is considerably cheaper in India.

      Asia-Pacific gets more deals

      The Asia-Pacific prediction builds on figures from 2004, which revealed that, for the first time, the number of deals in Asia-Pacific (278) exceeded those in North America (252). The value of the Asia-Pacific deals was also materially larger than in previous years, dominated by the $7.9 billion merger of Yamanouchi and Fujisawa in Japan.

      Deal activity rates grew in all markets except Eastern Europe. Western Europe saw a growth rate of 11 percent, North America 20 percent and Asia-Pacific 37 per cent.

      The analyst from CII says that the ability of Indian companies to discover innovative drugs is yet another factor that is facilitating global deals.

      Global scenario in Pharma

      According to PWC Insights, an increase in deal activity in the pharmaceutical and related healthcare sectors was seen in 2004, mirroring M&A recovery in other industry sectors. Deals rose by 20 per cent to 1,808 transactions. The aggregate value of deals increased by 53 percent to $112 billion in 2004, excluding Sanofi-Synthelabo's $60 billion acquisition of Aventis, the biggest deal in the sector since Pfizer's merger with Pharmacia in 2002. The deal has made Sanofi-Aventis the third largest global Pharma company after Pfizer and GSK. In 2004, there was a significant increase in pharmaceutical M&A activity with values rising to $100 billion almost reaching the record levels of 2000. In the pharma sector there were eight deals valued at over $1 billion, compared to five in 2003. The overall improvement in market sentiment is reflected in the increase in deals to 703 from 568 in 2003.

      The pharmaceutical industry is all set to make M&A its trump card to fine-tune research abilities and reach out to global markets.

      September 09, 2005


      Share this Article!

    Back to top^