Pfizer rejoins pharma stampede to India

Today's news out of India: Pfizer is shopping around for deals. The Economic Times reports that the drugmaker has kicked tires at Zydus Cadila, Emcure, Intas Pharma and Mankind Pharma. Of course, Pfizer has already set up a couple of alliances on the subcontinent; some sort of Indian partnership or acquisition is practically a requirement for Big Pharma these days. But with patents on key drugs--including Lipitor--expiring soon, the company may need more.

But the Times says that Pfizer's reported targets were less than keen on the company's proposals. And as a new analysis from [email protected] points out, Indian companies have realized that multinational pharma needs them. They've read the stats, which show the domestic drug market growing at a 12 percent annual clip. They've witnessed the deal-shopping by Sanofi-Aventis, GlaxoSmithKline, Daiichi Sankyo, et al. That's making them more likely to hold out for higher prices.

The truth is, India finds itself on the business end of several pharma trends: Cost-cutting, because operational costs are lower there; focus on emerging markets, because growth there is outpacing the rest of the world; and diversification, because lots of Indian companies are big into generics, offering branded drugmakers a new line of business. Plus, the Indian market is fragmented, making it ripe for consolidation.

Hence Pfizer's scouting around the Indian market, joining other shoppers like Sanofi (which is still looking for acquisitions) and Glaxo (rumored to be negotiating a stake in Dr Reddy's Laboratories). More deals are sure to be in the offing.

- read the analysis from Wharton
- see the Economic Times news
- get more from Reuters