While Novartis AG, GlaxoSmithKline and Eli Lilly are unclear about the long-term impact of deal on their India businesses, there is unlikely to be any direct or immediate impact.
Industry analysts expect more of such swapping deals in the coming years mainly due to the dried up patent product pipeline in the global pharma arena. “This move has been propelled by the almost dried up patent product pipeline. This situation is going to prevail for quite a few years so we should expect more such swapping of assets in the near future,” said Zarir H Charna, former director, corporate communications, Ranbaxy Laboratories.
The venture involving the three companies will globally see Novartis sharpen its focus on the high-grossing cancer sector and GSK seizing the chance to boost its share in vaccines.
While Eli Lilly’s animal health unit, Elanco, which has bought Novartis’s animal health unit, does not operate in India, GlaxoSmithKline Consumer Healthcare said the deal won’t affect its business in India. Novartis India, on other hand, said it was too early to comment as certain global regulatory approvals were still pending. “As of now, we see no clear impact of the deal on the Indian drug market,” said DG Shah, director-general, Indian Pharmaceutical Alliances.
Most officials at domestic pharma firms and consultancies labelled the deal as a brilliant marketing strategy. “It is a win-win situation for all the companies because hiving off loss-making divisions will increase profits,” said an analyst at leading global consultancy.