News Feature | March 26, 2014

Investors Still Interested In Indian Pharmaceuticals

By Marcus Johnson

While pharmaceutical companies based in western nations are complaining about the conditions and products being produced at Indian drug companies, investors are still interested. Western based drug producers have claimed that India's lax laws regarding drug production, safety, and intellectual property   create an environment that is detrimental to business. In the past few months, US regulators have stepped in, starting an investigation into India's relationship with its pharmaceutical industry.

The lobby group for Indian drug makers is the Indian Pharmaceutical Alliance (IPA). The IPA has denied claims that India's products are inferior, or that Indian intellectual property rights are bad for business. Dilip G. Shah, the IPA's secretary general, said that a new intellectual property law in 2005 helped spur investment in Indian firms. “The obvious corollary is that these investments have been made because global pharmaceutical companies and others believe that the business environment in India is positive overall,” said Shah.

Foreign investment has helped expand the Indian pharmaceutical industry, and industry experts believe that investment will continue for the foreseeable future. Even some multinational pharmaceutical companies are investing in India. GlaxoSmithKline raised its investment in its Indian unit earlier this year. The IPA points to investments such as the one made by GlaxoSmithKline as indicators that India is still ripe for pharmaceutical investment and economic development. Other recent investments in India include Mylan Inc. and Sanofi SA's acquisitions of Indian drug companies. Rajiv Malik told reporters that he believed India was a “global manufacturing hub” and that his company was “pursuing growth in the local market.”