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Pharma MNCs GSK, Merck, Pfizer Now Prefer Tie-ups With Indian Firms: Change in Strategy

Acquisitions are more attractive than alliances, as Daiichi Sankyo chief Takashi Shoda said back in 2008, because it set the stage for more Indian companies to be taken over by their powerful European and American counterparts.

Right now Big Pharma is rethinking, The India Times reports that Indian drug makers are flooding developed markets, companies like GSK, Merk and Pfizer now prefer tie-ups over acquisitions with Indian players. A testimony to this change in strategy is the numbers of partnerships that have emerged in the last few years.

Challenges

Four reasons mentioned in the article for this phenomenon are:

* Multinational pharmaceutical companies find it difficult to sustain the growth momentum that they have been witnessing for the last couple of years.
*A fast exhausting pipeline of drugs
*Expiry of existing patents and
*Enormous cost involved in developing new products

Opportunities

Pfizer MD Kewal Handa said:

“The reasons for partnerships are many. But I see two primary reasons. The Indian market is getting more regulated and thus offers more scope for multinationals. Secondly, Big Pharma are finding more value addition by tying up with Indian companies.”