At least two pharmaceutical multinational companies have created subsidiaries in India for product development and large-scale manufacturing. These are Merck KGcA India Pvt Ltd, a wholly-owned subsidiary of Merck AG, Germany -- and, Novartis Enterprises Pvt Ltd -- a 100 per cent subsidiary of Novartis, Basle.

Industry sources say that Warner Lambert of the US is likely to be the third company to follow suit with a hi-tech R&D centre in Hyderabad through its local subsidiary Parke Davis India Ltd.

Says Anand Apte, managing director, Merck Development Centre India Pvt Ltd: "This is the first R&D investment of the German-based Merck group outside its own country. Setting up a separate subsidiary for development is a long-term strategy of the company.

"India seems to be the country of choice because of its scientific pool of knowledge and trained manpower. The country has the right industrial base and R&D environment, with good communications facilities and knowledge transfer abilities. Adding to this is the proven performance of scientists and chemists in the past coupled with congenial policies and regulatory environment."

Following the merger of Sandoz and Ciba (Novartis) in India, the entire business was split into seven different companies. However, one among them -- Novartis Enterprise Pvt Ltd -- remained a 100 per cent subsidiary of Novartis AG, Basle. This subsidiary is a manufacturing base for the parent company.

Earlier in 1999, an R&D centre was commissioned by Novartis Enterprise at its production facility at Thane for process research and development of scale-up technologies. Industry sources say that the centre will aid the parent company in developing product dossiers for off-patent generic formulations. Novartis AG''s generics business is handled by Biochemie.

French company Galderma, which recently received approval for a 100 per cent subsidiary, is another company which intends to make India a manufacturing base for products sold in South East Asian countries.

Similarly, Ferring Pharmaceuticals, a 100 per cent subsidiary of Dutch major Ferring BV is setting up a manufacturing unit in Mumbai for producing speciality proteins and hormones. Though the unit will function as a captive plant initially, the company will consider the possibility of making this facility a manufacturing base for South East Asian countries.