FDI in pharma to boost mergers and acquisitions, say experts

-

Govt’s decision to increase FDI to 74% in existing pharma companies is expected to boost mergers and acquisitions and private equity investments in the sector.

The government’s decision to increase foreign direct investment (FDI) to 74% in existing pharmaceutical companies through the automatic route is expected to boost mergers and acquisitions (M&As) and private equity investments in the sector in future, said experts.

Allowing FDI beyond 74% will continue through the government approval route. Earlier, 100% FDI was permitted through the government approval route. The government has also allowed 100% FDI under the automatic route in greenfield pharma.

India’s pharmaceutical market may reach $20 billion this year and about $55 billion by 2020 from about $18 billion as of 2014, clocking a compounded annual growth rate (CAGR) of over 22%, according to a joint study by the Associated Chambers of Commerce & Industry of India (ASSOCHAM)-TechSci Research released in June.

“Keeping the cost of production low in India and with high pricing in the US, the margins Indian generic firms make are very high. Even the branded generics market in India has high margins. I believe there is a lot of synergy in cross border deals and with this FDI proposal, it will increase the number and size of deals,” said Ameera Shah, managing director and chief executive officer, Metropolis Healthcare.

“This is a welcome change for global pharma players looking at establishing a presence in India but not looking for a 100% stake. Some foreign investors actually prefer having local partners, and this change will facilitate those deals,” said Sameer Sah, associate partner, Khaitan & Co.

“The new FDI norms are steps in the right direction. They will stimulate more M&A and investment in CRAMS (Contract Research And Manufacturing Services). We need to now streamline regulations, particularly Drug Price Control Orders (DPCO),” said Kewal Handa, industry expert and former managing director of Pfizer India.

Source: http://www.livemint.com/Companies/UuPjuc77Bqn4ZcxITQj4xK/FDI-in-pharma-to-boost-MAs-PE-investments-say-experts.html

Comments

Post a Comment

Popular posts from this blog

China-India joint summit discusses bilateral trade to improve pharma industry

-
The China-India joint summit held recently discussed bilateral trade to improve Indo- China pharma industry and address issues like long product registration time and high fees for product registration in China’s drug regulatory system, among other issues.  Besides this, other relevant key issues related to transparency in public procurement system in China and clinical trial related approvals were also deliberated at the summit organised under the aegis of Indian Pharmaceutical Association (IPA), Shengjie and SaSPinjara, China between May 16 and May 17, 2019 at Pullman Shanghai South, China. The summit was focused on enhancing export business for both the nations across the globe. Senior health ministry official from Government of Gujarat Punamchand Parmar was invited as the Chief Guest of the summit and Gujarat Food and Drugs Control Administration (FDCA) Commissioner Dr Hemant Koshia was invited as Guest of Honour.  Among other dignitaries, Dr. Anil Kumar Rai, Consulate General of
Read more

Webinar on ‘OPPORTUNITY TO COMMERCIALIZE HERBAL RESEARCH’

-
Image
“IDEA TO MARKET” is an idea hunt to commercialize the herbal inventions. It is a platform for researchers to use their innovative ideas in the area of herbal research and get the products commercialized in collaboration with corporate partners.  Hurry up and register for the webinar to know more about this program. The webinar is organized by Bombay College of Pharmacy and Pharma Literati.  Registration Link for webinar on OPPORTUNITY TO COMMERCIALIZE HERBAL RESEARCH: https://docs.google.com/forms/d/e/1FAIpQLSfUhe1LtCOjG50SilFw_iECnzBXu4CW0nK2wIvd8QVVvpDOzQ/viewform
Read more