Home > Indian Industry News, Pharmaceuticals > Indian Industry News: Abbot Acquires Piramal Healthcare

Indian Industry News: Abbot Acquires Piramal Healthcare

Abbot India has acquired Piramal Healthcare (domestic formulations) for an upfront payment of $2.12 billion and an additional payment of $400 million annually for the next four years. Piramal Healthcare will retain its contract manufacturing, critical care and over the counter all of which cumulatively generate Rs 1,700 crore revenue but where margins are lower.

The Piramal group is a branded generics company with a market share of 4%. This move will result in Abbot becoming the market leader with 7% share in India.The market size of the Indian pharmaceutical industry stood at around Rs 42,000 crore at the end of March 2010, state media reports.

Emerging markets account for about 20% of Abbot’s business. India, especially, is being seen as a great opportunity by multinational drug makers after the healthcare bill was passed by the US government in March this year to provide low-cost healthcare coverage.

Generic drugs are a lot less expensive as they are not protected by patents — leading to more competition and, hence, lower margin. MNCs are thus attracted towards the Indian pharma market, whose strength lies in generics. Big pharma’s main markets — North America, Europe and Japan — are under serious pressure from slowing growth, a raft of patent expiries and pending policy changes that would promote use of more affordable generics in future.

Source: Economic Times, 22 May ’10

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