Acquiring Piramal Healthcare’s domestic business will make Abbott the largest drug company in India in market share and the largest multinational one. In a telephonic interview with P B Jayakumar, its Senior Vice-President, Established Products, Michael J Warmuth, talks about the Indian drug market. Edited excerpts:
Will the deal with Piramal Healthcare give you the desired results?
We have been in the Indian market for the past 100 years. This is a great country, with great opportunity for the generics business, especially branded products. This is the second-fastest growing emerging market, with over $8 billion turnover and expected to double by 2015. Our Indian operations were ranked at 18 earlier, with a market share of about 2.5 per cent. With the recent acquisition of Solvay Pharma and now Piramal’s domestic business, which had a ranking of fourth place here with a share of over four per cent, we will become the largest player in the Indian market, with above seven per cent market share, and the largest field force in India, with about 7,000 people. India will remain a key market for us.
Abbott has been aggressive in the recent past in developing the generics business globally. How will this acquisition add to this?
We have created the Established Products Division to optimise opportunities in emerging markets. Solvay’s acquisition helped to add $850 million worth of products in emerging markets, mainly countries like Russia. We expect sales of $5 billion this year and half of it will come from emerging markets, with double-digit growth.
Significantly, we have made a strategic alliance with Zydus Cadila of India for supply of 24 products in 15 high-growth emerging markets, with an additional option of another 40 products and these will hit markets by 2012. We expect Piramal to add about $500 million revenue in 2011 and our total sales in India are expected to exceed $2.5 billion by 2020, building on this deal and other deals I mentioned earlier. We expect Piramal’s domestic business to grow over 20 per cent over five years and from our point of view, it is a good deal.
Will you integrate the business of Piramal Healthcare with Abbott India and delist from stock exchanges at a later stage?
Piramal Healthcare has good domestic business, with established systems and scale. As of now, it will continue as a standalone business under our Established Products Division. Abbott India is a listed company.