Roundtable Wrap-Up from India

In 2006, Ernst & Young Global Pharmaceutical Center leadership held client roundtables around the world to explore the shifting landscape facing pharma companies. What are their challenges? What choices do they need to make to achieve the right balance between risk and reward?

Mumbai, India. The following important insights come from the Mumbai Pharma Roundtable that Ernst & Young hosted on 9 October 2006.

Growing the Pharma Foothold
The growing importance of India's pharmaceutical sector is clear on several fronts, from Western multinationals' investments in strategic alliances with leading Indian companies to Indian manufacturers' appetite for acquisitions abroad and the fierce competition for executives in the Indian market.

• Inbound Investment. Multinational US and European companies are showing little interest in acquiring Indian pharma assets, though they are increasingly interested in entering into strategic alliances with some leading Indian companies. One of the reasons multinationals may be favoring alliances over M&A could be that earlier restructurings by Indian companies reduced the scope of opportunities for US and European multinationals to achieve cost savings through mergers and acquisitions and subsequent streamlining.

• Outbound Investment. More large India-based pharma companies are acquiring and/or entering into alliances with Western multinationals in Europe and the United States. The trend is expected to continue as India-based companies seek to fuel inorganic growth in developed markets, especially in Europe. Despite the vastness of the US market, the higher price of generics in many of Europe’s markets may allow for greater profitability.

• Human Resource Trends. The demand for talent has never been greater and wage inflation is increasing in the Indian pharmaceutical market. Now, among both domestic manufacturers and subsidiaries of multinationals operating in India, a high retention rate is a competitive advantage and something few have achieved. Executives are also realizing that, in the future, successful transactions in India will involve focused negotiations on human resource issues pre- rather than post-transaction.

Additional Roundtables

Progressions 2006
The Ernst & Young Annual Global Pharmaceutical Report

To request your own copy of Progressions 2006, The Ernst & Young Annual Global Pharmaceutical Report, please contact your local Ernst & Young pharmaceutical representative.