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Sunday, December 13, 1998

Pharma cos on consolidation drive

ENS ECONOMIC BUREAU  
MUMBAI, DEC 12: The pharmaceutical industry is expected to consolidate further and by 2010, the international industry could actually comprise just 25 to 30 companies. Of these, just five to 10 very large operations will dominate the rest, according to the PJB Publications executive chairman Philip J Brown.

Brown, a fellow of the Royal Pharmaceutical Society of Great Britian and responsible for a host of top-notch healthcare publications like Scrip, Pharma project etc, was in Mumbai to address an international congress organised jointly by the Indian Pharmaceutical Congress Association (Ipca) and the Federation of Asian Pharmaceutical Associations (Fapa).

Brown said that in the past 20 years, the number of research and development-based companies had been falling as they merged, one after the other, into larger units. "They will continue to merge as they find themselves unable to renew their product portfolios every 20 years with negative consequences for their revenues and profits. So companies must beable to reinvent their entire portfolio every 20 years.

The increasing specialisation of their new product output could make this renewal process even harder than it was in the past," Brown said. He added that mergers were traumatic affairs for those who work in the companies concerned and take place to ward off trouble rather than create strong new entities.

He said that in the years to come, companies will include the development of lifestyle products like Viagra and Xenical which will have high patient demand but which will not necessarily be reimbursed by national health services.

Besides, companies will also try to sell their branded products to patients who can afford to pay the premium price, either directly from their pockets or through private insurance. Direct-to-consumer advertising and internet communications will be used increasingly to stimulate demand for branded products both before and after patent expiry.

Brown also said that only when countries reach a certain level of economicdevelopment, the R&D-based pharmaceutical products have a role to play in the health of a nation. Then the products which are made available address the specific health problems of those societies. "Also, as the health needs of those nations change, so too does the profile of pharmaceuticals that are brought through R&D efforts to those markets," he said.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.


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