Indian Pharma companies to engage in more M&As
Indian pharma companies would be engaging in more Mergers and Acquisitions (M&As) in the coming next two years not only in the US market but also in emerging markets like Russia, Africa and Latin America according to research by Moody’s Investors Service. There would be more incidences of company acquisitions, acquisitions of assets, buying of overlapping drugs due to consolidation for the period mentioned.
December 13, 2016: Due to moderating organic growth rates and stagnant profitability in recent times, Indian pharma companies have been looking at M&As. Indian pharma companies’ global revenue growths have fallen to 10 per cent in the last five years. The Compound Annual Growth rate for the FY14-16 have been 11 per cent against 21 per cent for the FY2011-14.
The US generics market is still lucrative for the pharma companies as they earn around half of their revenues from it, whereas the emerging markets provide strong growth opportunities due to low healthcare penetration and rising income levels.
Indian pharma companies, however, still need to focus on adherence to global quality norms as there has been rising quality scrutiny from international regulators.