Merck to take buyout route to grow here

NEW DELHI: The world’s second-biggest drugmaker, Merck & Co, is looking at acquisitions and alliances with local firms to scale up its business in India, signalling a shift in its strategy, a top company executive said.

“This could be to fill portfolio and capability gap,” Ramesh Subrahmanian, senior vice-president and president, Asia Pacific human health, Merck & Co, said on the sidelines of the India Economic Summit.

However, he did not elaborate on the portfolio and capability gap. The American company plans to be among the top two pharmaceutical companies by 2015 in the fiercely-competitive Indian drug market. This is an ambitious agenda considering that it is currently ranked 28th in the Indian retail market with a 1% market share.

Following its acquisition of Schering Plough, Merck now operates three entities Schering Plough India, Organon India and Merck Sharp and Dohme (MSD), the local arm.

It has so far shied away from buying Indian pharma companies, a trend among its global counterparts as they look at emerging markets to beef up sales. The notable ones include Daiichi Sankyo’s acquisition of Ranbaxy and Abbott’s buyout of the local formulation business of Piramal Healthcare.

“We are looking at acquisition opportunities not just in India but in all emerging markets,” he said.
The company has been looking at achieving its target of sitting on the top two positions through product launches backed by comprehensive marketing services by 2015.

The company plans to launch its rotavirus vaccine and a cardiovascular product in the first half of the next calendar year, Mr Subrahmanian said.

More than half of its odd 70-80 products (by value) are made locally with its partners and the company has no immediate plans to set up its manufacturing in India.