What is causing the increased buyout of generic companies by innovator pharmaceutical players and will this continue?
Consolidation will continue due to the pressures on Big Pharma be it drying product pipelines, productivity of research and development spends, rising costs, the increase in time it takes to get a drug approved, and the slower and a more conservative approach of regulators to approve new products. Acquiring a generic player gives the innovator company such as Daiichi, in the case of Ranbaxy, a presence in 60 countries, a basket of Para IV filings and knowledge of the regulatory processes. This is not only limited to MNCs buying into Indian companies but Indian companies buying up European and American companies as well so that they can have access to those markets. The reaction to innovator companies buying out Indian companies has been that Indian promoters are shoring up their shareholdings so that they can repel these bids or get a higher valuation for their stakes. What business models (CRAMS/generic play/pure research) are best suited for growth as far Indian players are concerned
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