The drug lords are sniffing for deals in India.Global pharmaceutical giants, which fought bruising patent battles against Indian firms just a few years ago, have decided to bury the hatchet and forge closer ties for mutual benefit.
Late on Monday, GlaxoSmithKline Plc struck a deal with Dr Reddy’s Laboratories to develop and market drugs across emerging markets.
Under the agreement, GSK will gain access to Dr Reddy’s portfolio of existing and future pipeline of 100 products in the therapeutic segments of diabetes, cardiovascular, oncology and gastroenterology.
Analysts expect a number of global pharma players to close deals with local producers of generics drugs to beef up their revenues. They reckon that the pharma giants will not only be looking at marketing deals, but also looking at acquisitions in the country.
Earlier this year, Pfizer Inc, which has fought legal battles with Indian firms over their generic drugs, signed a similar deal with Aurobindo Pharma to market medicines that are not protected by patents.
The understanding is that Aurobindo will make the products and Pfizer market them in the US and Europe. Last month, the two companies announced that they planned to expand the scope of the partnership to cover more drugs.
Observers say multinationals are under pressure to ramp up revenues at a time when their drug pipelines have started drying up because of the high costs of innovation and have, therefore, identified generics as a good revenue-earning stream.
“Many drugs are going off patent over the next few years. Therefore, generics will gain in importance. Overseas companies may therefore look either at acquiring generic drug companies or entering into deals with them to expand their reach and portfolio,” said Sarabjit Kour Nangra, analyst at Angel Broking.