The Hindu Business Line : Teva-Ivax merger likely to create shifts in pharma sector

THE merger of Israeli drug major, Teva, and the US-based Ivax to create the world's biggest producer of generic or me-too drugs is expected to have its repercussions on a clutch of Indian drug companies.

Apart from major plans that Ivax Corporation had for India, as outlined by a top official who visited India last year, the company also has alliances with Cipla, RPG Life Sciences, Wockhardt, and Nicholas Piramal India.

A joint statement by Teva and Ivax on Monday said that the US Federal Trade Commission had cleared Teva's acquisition of Ivax, but they would be "required to divest certain formulations of 11 generic drugs with respect to which they have a product overlap, representing approximately $15 million in aggregate annual sales."

The statement also said that generic distribution relationships that Ivax had with respect to certain amoxicillin, amoxicillin and clavulanate, leuprolide, and calcitriol products have been or will be terminated and assigned to other companies.

Cipla has a supply agreement with Ivax for a large portfolio of generic products.

Without giving the details, a top Cipla official said that the supply agreement may not be affected per se. However, there may be an impact when Teva and Ivax rationalise their products, he added.

RPG Life Sciences, however, has a multiple product distribution arrangement with Ivax, a spokesperson said, unwilling to divulge details.

Wockhardt too had a distribution arrangement for medicines in the UK in 2002, an industry representative said.

However, with Wockhardt establishing its own network in the UK following its acquisitions there, it is unlikely to be affected by the Teva-Ivax merger, he added.

Nicholas Piramal too has an alliance with Ivax, but company top brass are not unduly worried by the recent development.

An analyst tracking the drug industry said that Indian companies having tie-ups with Ivax are likely to see some shifts happening.

Apart from the two stated conditions on overlap of products and termination of distribution agreement on specific products, there could be a relook at the agreements and renegotiation of prices depending on Teva's existing product portfolio and strategy.

But it is unlikely that Teva will rock the boat too much, as India is an important base to have covered for any multinational, he added.

Clarity is also yet to dawn on Ivax's own research and manufacture plans in India, according to him.

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