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P.T. Jyothi Datta

New Delhi , Dec. 28

THE year 2003 is being viewed as the year that saw "globalisation of the Indian pharmaceutical companies."

And the facts speak for themselves, the last six months have seen overseas acquisitions of generic drug companies by at least three Indian pharma companies - Wockhardt, Zydus Cadila and Ranbaxy.

While Indian drug companies have been constantly evolving from targeting global generic (chemically-equivalent drugs) markets to the regulated and "litigation-happy" markets like the US and Europe - the emerging face of the domestic drug major is one that seems to have an appetite for more acquisitions in the global arena, as a first step towards stepping up exports to these regions, say pharma industry observers.

July this year saw Wockhardt acquire CP Pharmaceuticals in the UK and Zydus Cadila formalise a similar deal with Alpharma SAS of France. Early December saw Ranbaxy ink a deal acquiring RPG Aventis, also in France.

The acquisition of BMS Laboratories and its wholly owned subsidiary, Meridian Healthcare, by Dr Reddy's Laboratories, in the not-so-distant past, adds fuel to the acquisition mode.

"The year has been a mixed bag, in terms of growth in the domestic market. But for Indian companies, it has certainly been the globalisation of India," observes Mr Rajiv Gulati, Chairman and Managing Director, Eli Lilly and Company (India).

On the domestic front, he points out, "The grant of Exclusive Marketing Rights (EMR) is a positive development. And the discordant noises being heard are basically teething problems. The Third Patent Amendment Bill has been tabled in Parliament and all these are encouraging signs."

"The year has been eventful, with the Indian pharma sector being recognised as a knowledge-based industry. They have moved into the regulated markets and created a niche for themselves globally and the coming year will only see more acquisitions overseas," points out Mr D.G. Shah, Secretary General, Indian Pharmaceutical Alliance.

On the domestic front, Intellectual Property Rights (IPR) issues have got top priority. "Both in industry and Government there is no dispute on the protection of IPR and this is validated by the granting of EMRs, the Patent Amendment Bill and the debate on Data Exclusivity. The discussions at present are more to do with definitions on how to protect IPR," he observes.

Mr B.K. Raizada, Advisor to Ranbaxy, agrees that 2003 has seen India emerging as a force to reckon with, particularly in the generic pharma space.

"Technology has now become more broad-based and this augurs well for the industry in the long-term. With the product patent regime to come into force post-2005, domestic drug majors will get into more mergers and acquisitions as they realise that it is not possible for a company to do everything."

He, however, feels that with the new Drug Price Control Order hanging fire, multinationals are holding back on plans and investments, fearing that their drugs could come under price control.

The pharma industry also supported an initiative to cleanse itself of the spurious trade, an effort that resulted in an amendment being introduced in Parliament seeking death penalty for fake drug manufacturers.

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