Considering high volume and profitability of generics in regulated markets like US, Europe, Japan, cash rich Indian pharma companies are targeting acquisition of generics business in these markets.

Indian companies are very active in generics. In a bid to focus on branded/patented pharmaceuticals, several global pharma companies have also embarked on divesting their generic portfolio in the regulated markets thereby providing billions of dollar acquisition opportunities for large Indian pharma players, said Rikin Sanghvi of ICICI Securities.

Large Indian pharma companies like Sun Pharma, Lupin, Aurobindo, Dr Reddy's, Zydus and Torrent Pharma are cash rich and have the ability to raise fund smoothly from debt as well as equity from capital markets. Most of them have enabling resolutions in place to raise anywhere from a billion to two billion dollars each from the capital markets, he said.

The acquisition of Allergan's generics business by Teva recently triggered the sale of certain products in USA and Europe on account of competition commission. Dr. Reddy's acquired a portfolio of 8 ANDAs for US$ 350 million, Zydus acquired 2 ANDAs for an undisclosed amount. The activity is not limited to the US alone. A couple of Indian companies are in the fray to acquire Teva's generics portfolio in Europe reported to be worth US$ 1 - 1.5 billion. Sun Pharma and Lupin recently acquired a portfolio of brands in Japan from Novartis and Shionogi, respectively.

The size of global pharma industry touched about USD one trillion in 2015 and is expected to grow to USD 1.4 trillion over the next 5 years. The growth will be driven by branded as well as generic products in developed markets. Antibiotics will continue to play crucial role in pharma growth in emerging market as compared to developed market. Life style diseases is changing the growth dynamics in emerging market, similar to developed market.

India having USD 30 billion drug market in 2015 is expected to touch USD 55 billion by 2020. In India, generic drugs have dominated 70 per cent market share followed by 21 per cent OTC, 9 per cent patented drugs. The market share of patented drugs will continue to remain same in future as the innovators are wary about launching patented molecules in India. Anti-infectives with 16 per cent market share is leading the Indian market. Life style diseases like cardiovascular and gastro comprise of 40 per cent of the total Indian branded formulation market.