U.S. Big 3 Look for New Indian Drug Suppliers (India)

Large U.S. drug wholesalers plan to outsource their requirements from upcoming Indian manufacturers, a move that will provide competition to such leading Indian drug manufacturers as Ranbaxy, Dr Reddy's, Sun Pharma, Lupin and Zydus Cadila, who have benefited tremendously from sales in the U.S. market. At least ten tier-II and tier -III Indian pharmaceutical companies with plants in Mumbai, Ahmedabad, and Hyderabad that are approved, or may be approved by the U.S. FDA, are reportedly on the radar of distributors McKesson Corporation, Cardinal Health, and AmerisourceBergen. These three wholesalers control nearly all the entire drug distribution market in the U.S. McKesson and Cardinal Health have reportedly sent executives to India to assess the capabilities of these companies. "It is difficult for any Indian company to do business with the U.S. without the big three who control over 90 per cent of the US drug market," said Sujay Shetty, associate director, PricewaterhouseCoopers. "India has the maximum US FDA approved plants outside the US and it is natural for them to look at India for new opportunities." India has a share of approximately 23 percent in the total abbreviated new drug applications approvals and 48 percent of the drug master filings with the U.S. FDA. The United States is the largest generics market, with 28 percent of global generic sales. This is expected to hit $94 billion by 2010 and drugs worth $65-70 billion are going off-patent in the next 4-5 years, according to research reports by Crisil Research and SSKI Investment. The move by wholesalers is aimed at tapping cost-effective generic manufacturers directly, increasing the supply base across the world. (Click here for more