Amidst the conflicting analyses on the pros and cons of the recent acquisitions made by Indian pharmaceutical companies in Europe, industry experts feel that European Union will continue to be a preferred destination for Indian pharmaceutical companies eyeing on inorganic growth for some more years. They believe that unlike United States, all types of facilities, big and small, are available across Europe. "The acquisitions would benefit Indian companies as it would provide them an easy route to enter the second largest drug market of the world," they say.

Commenting on the recent acquisitions made by Indian pharma companies, Sanjiv Kaul, managing director, Chrysalis Investment Advisors, India said that the acquisitions made by Indian companies are not outrageous and they still do have an arbitrage. "In Europe all kinds of assets are available. EU is still not one state and you can use side doors for entering into the main market. This is a risk mitigating strategy and makes business sense as you are not betting only on the US business," he opined.

Experts also point out that the P multiples are maximum in India and such acquisitions make sense even from a financial intelligence point of view. "The increasing trend among leading Indian pharmaceutical companies to go for foreign acquisitions is to continue for some more years," they believe.

The attempts of Indian pharmaceutical companies to set up marketing base in all major drug markets were also lauded. Interestingly, industry observers feel that the generic prospects of India will be more beneficial to the country as a whole and not just Indian drug companies.

"India may soon become the most preferred base for generic drug manufacturing in the world. With Indian companies developing huge bulk drug manufacturing capacities and generic drug production capabilities, the country is being looked upon as the best destination for generic drug outsourcing," they opine.

Expressing a similar view, Kaul said that the generic space is going to cut across boundaries. "The emergence of India as the generic manufacturing hub doesn't imply that it's going to benefit domestic companies alone. It can be helpful to all the players that decide to outsource their generic production from the country," he said. It should be noted that all top generic players like Teva, Sandoz and Actavis are already having active presence in India.

However, the CRAMS model that is being followed by several Indian companies is yet to be appreciated by Indian financial markets, they felt. "Indian contract manufacturers are yet to demonstrate their strengths," they added.

It should be noted that Pharmabiz had recently carried a report on a survey held among 179 executives of leading global pharma companies, which revealed the importance they have given to India in their immediate business plans.

The survey, conducted by global business consulting firm Bain & Company and Knowledge@Wharton with help of the Organisation of Pharmaceutical Producers of India (OPPI) stated that 45% of respondents from companies with headquarters in North America believe India will figure prominently in their business plans five years from now. While 38% of respondents felt that doing business in India was extremely important today, 62% expected it to happen in five years from now.

"Generics will continue to be a strong driving force for the Indian pharma industry, even as it brings them into direct competition with global players in the major markets of North America, Europe and Japan. The general trend toward price consciousness in the developed markets is one important factor in the rising prospects of India's pharmaceutical sector. Patients, physicians and healthcare payers are increasingly willing to consider generics as a lower-cost alternative to branded medicines. Equally important, big pharma companies recognize the need to look outside their traditional business models for new capabilities, even in areas that are strategic such as drug development and production," Ashish Singh, managing director of Bain & Company India Pvt. Ltd noted.