US major Merck is looking at catching up with its rivals including GSK, Abbott to be among the top five players in India.
The zeal to be among the top drugmakers in the fast growing Indian market is spreading among all multinational companies.
US major Merck is looking at catching up with its rivals including GSK, Abbott to be among the top five players in India.
K G Ananthakrishnan, managing director, MSD Pharmaceuticals, the Indian subsidiary of Merck, said from the current rank of 29, MSD is looking at being in the top 5 by 2015.
“We plan to achieve this by introducing our global products and partnering with other firms.”
By 2015, the pharmaceutical market in India is expected to be $20 billion, as per the estimates of consulting firm McKinsey & Co.
Though 29 to 5 is a big jump, Ananthakrishnan feels it is quite possible.
“We will focus on mainly organic growth. We are launching six global brands this year in areas like infectious diseases, cardio-vascular and respiratory ailments, etc, all of which are key concerns in India,” said Ananthakrishnan.
He said that the company is not averse to inorganic opportunities, which make a strategic fit.
However, he maintained the “no comments” approach on the growing speculation that Merck is planning to buy Indian behemoth Cipla.
MSD, which is growing at 17-18%, jumped from a rank of about 131 in India three years ago to 29, post the global acquisition of Schering Plough by the parent Merck in 2009 for $41.1 billion.
Industry experts say that it seems nearly impossible for any player to scale such a huge gap through the organic route.
“Acquisitions are the only way a firm can scale up rapidly like the way Abbott did. Launching products provides gradual growth,” said Adithya Bhat, MD, consulting firm Protiviti Consulting.
And acquisitions means being lucky enough to get the right kind of valuations, which are now on the higher side, post Piramal Healthcare selling its domestic formulations business to the US-based Abbott Labs last May for a jaw-dropping Rs17,000 crore.
“Domestic assets may be overvalued and conclusion of deals may get time-consuming,” said a senior official from an MNC.
After the Abbott-Piramal deal, which somersaulted Abbott to the No.1 position in India (ahead of Cipla, Ranbaxy, GSK), all other MNCs are getting sleepless nights over how best to consolidate their positions.
GSK, Sanofi Aventis, Abbott are all using the dual strategy of launching more and more products in India and making acquisitions to strengthen their positions.
“It’s a plan MSD or any MNC worth its salt has to have to remain competitive in India. All MNCs are focused on maintaining or reaching a top position. Only time will tell who succeeds and who does not,” said Bhavin Shah, research analyst from Dolat Capital Market.
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