Consolidation in the Generic Drugs Industry*

            


Details

Case Code : CLBS049
Publication date : 2008
Subject : Business Strategy
Industry : Pharmaceutical
Length : 04 Pages
Price : Rs. 50

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Key words:

Generic drugs industry, pharmaceutical, consolidation phase, M&A, Mylan, Merck, Teva, Sandoz, global market for generic drugs, Barr, Watson, Actavis, Ranbaxy, Dr Reddy’s Laboratories Ltd (DRL), emerging market, Ivax, Hexel, Pliva, low-cost manufacturing, betapharm, patent law


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Abstract: ICMR India ICMR India ICMR India ICMR India RSS Feed

The global generic drugs industry was witnessing a trend towards acquisitions and consolidation. Between 2005 and 2007 there were a number of high profile M&A deals in this industry as the top companies such as Teva, Sandoz, Barr and Mylan consolidated. The top companies were also eyeing Indian pharmaceutical companies for M&A deals considering that the Indian pharmaceutical companies provided value that went beyond providing just a low-cost manufacturing platform.

Issues:

 » Environmental analysis.
 » Reasons for consolidation.
 » Reasons for the growing attractiveness of Indian pharmaceutical companies as targets for M&A deals.

Introduction

In 2007, US generic drugs major Mylan Inc. (Mylan) acquired the fourth-largest generic pharmaceutical company, Merck KgaA’s generic unit. This established Mylan as the world’s third-largest generic drugs company with a combined sales of US$4.2 billion (in 2006), behind Teva Pharmaceutical Industries Ltd. (Teva) and Sandoz .


Analysts said that the industry was witnessing a trend towards acquisitions and consolidation...

Questions for Discussion:

1. What, according to you, are the reasons for the consolidation in the global generics drugs industry? What benefits are being derived by the companies undergoing this M&A deals?

2. Why, according to you, are the global generic drugs companies eyeing Indian pharmaceutical as prime targets for M&A deals?

3. Do you agree with analysts that acquisition by global generic drugs companies would be beneficial for Indian pharmaceutical companies? Give reasons for your answer.

Cases on related topics

1. Mylan's Acquisition of Matrix
2. The betapharm Acquisition: DRL's Strategy of Inorganic Growth in the US
3. Ranbaxy's Globalization Strategies and its Foray into the US