Pharma sector fared well in 2001
Our Corporate Bureau
28 December 2001
New Delhi: Bucking the global and domestic slowdown in the economy, the Indian pharmaceutical industry is on a high trajectory with over a 12-per cent growth even as it confronted players abroad on issues like "patents Vs patients" to provide cheaper medicines for dreaded diseases like Aids.
While the new drug policy continued to remain elusive throughout 2001, the over Rs 23,000-crore industry, catering to the world's fifth largest market, sought to consolidate and grow through mergers and acquisitions with some companies looking for expansions abroad.
Awaiting a new policy in the hope that it would lift market restrictions to a great deal by limiting the scope of price-control mechanism, the domestic players also took cudgels against global majors on patent issues in their resolve to help the African countries by providing anti-Aids drugs at a substantially low price.
At home, however, consumers suffered shortages of some common medicines like the popular pain-reliever Aspirin that were brought under the price control mechanism, forcing some of the players to introduce paracetamol-based medicines as substitutes.
The pharma sector also bucked the worldwide investment trend with funds continuing to flow into the sector at a time when major financial institutions were exercising restraint in other areas of the economy. Cashing in on this scenario, the domestic players sought to consolidate themselves through mergers and acquisitions of brands or companies.
In tune with the industry trend, Zydus Cadila acquired a stake in German Remedies along with the rights of over a few of its brands. The takeover giant Nicholas Piramal, while restructuring its home, took over Rhone Poullenc.
In contrast with other sectors, where foreign investment has been restrained, the pharma sector witnessed international investment, with the World Bank's private investment arm, International Finance Corporation, picking up a stake in the Chennai-based Orchid Chemicals.
On the brands front, Morepen Labs created a flutter by buying out the old-time popular antiseptic brand Burnol for its over-the-counter division, Dr Morepen, while announcing that it will go in for more acquisitions on the formulations side as well as OTC.
The sector also witnessed some breakups, with Eli Lilly buying out its joint-venture partner Ranbaxy's stake to form an independent company and Nicholas Piramal snapping its marketing joint venture with Reckitt Benckiser.
Ranbaxy joined hands with Cipla and Glaxo to market its once-a-day ciprofloxacin in India, while suffering the jolt of pared milestone and royalty payments from Bayer AG that had bought the rights for the new drug delivery system from it.
The multinational pharmaceutical major Glaxo Smithkline Beecham consolidated its Indian operations and completed its merger in line with its global merger.