India Invests in the Americas for Pharmaceutical Sector Growth

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Reported by Annette Kreuger, Industrial Info Resources (Sugar Land, Texas) The news that Hollister-Stier Laboratories LLC (Spokane, Washington) was acquired by an Indian company caught a few in the industry off-guard. The contract manufacturer is one the nation's leading CMOs and is in the midst of a $30 million expansion. Jubilant Organosys Limited, one of India's largest custom research and drug developers purchased Hollister-Stier for $122.5 million and added another $16 million to help defray the cost of the expansion. Jubilant's acquisition gives it Hollister's sterile injectable vial and in-demand lyophilization production capacity. It is considered to be the largest purchase to date of an overseas CMO by an Indian company. But, by all appearances, it will not be the last.

A little further south, in central Mexico, Dr. Reddy's Laboratories Limited purchased a drug production facility for $59 million in 2005. Dr. Reddy's, one of India's largest pharmaceutical companies, was following a growing Indian investment trend that has reached $7 billion in Latin America over the past decade. Some believe that figure will now double in half that time.

The Latin American market is perceived as a natural fit for Indian manufacturing firms, who are well-versed in serving low-income consumers at home. A generic drug maker like Dr. Reddy's can offer low-cost alternatives in a region where U.S. and European multinationals have long dominated .Based in Hyderabad, India, Dr. Reddy's had already been selling its antibiotics, stomach remedies and allergy medications throughout Latin America. But the purchase of the former Roche plant is the first time it has instituted manufacturing there. The factory's main product is naproxen. That's the active ingredient in over-the-counter painkillers such as Aleve, which is manufactured by Bayer, a major customer of Dr. Reddy's.

The Indian drug industry has a presence in Brazil, Mexico, Argentina, Colombia, Chile, Venezuela and Peru. Their members enjoy a competitive edge, as the prices of medicines in Latin America are 3 to 20 times higher than the prices in India. India has established its name as a reputed supplier of bulk drug products. Since most of the countries do not currently produce bulk drugs, India hopes to embed itself as a regular supplier. In the meantime, finished formulations, or the actual drug products, from India are now being registered for sale in some countries of Latin America.

More than 20 Indian manufacturers have U.S. FDA accreditation and the industry is increasingly gaining a solid reputation for supplying high quality products to highly regulated markets. Due to adequate availability and proven caliber of qualified personnel, recent studies claim that no Indian firm with FDA accreditation has encountered GMP compliance problems. Assessment for GMP certification of Indian manufacturing sites is monitored under the guidelines evolved by the World Health Organization (WHO). Oversight and certification for international commerce in drugs is conducted by Indian Central and State Drug Control Officers. There are currently over 200 manufacturing units in the country that qualify for certification.

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