Indian generics companies to strengthen in 2011

Generics/News | Posted 01/04/2011 post-comment0 Post your comment

Dispute with EU resolved

The EU and India have resolved a dispute about the seizure of generic medicines passing through Europe en route to Africa and Latin America. In 2009, the EU repeatedly seized generic drugs originating in India as they passed through European ports on their way to Brazil.


The World Trade Organization dispute was initiated by India and supported by Brazil. The EU made the seizures on grounds of patent infringement, but India and Brazil disagreed with those claims. As a result of India and Brazil’s concerns, the EU is examining its rules that triggered the disputes.

By amending customs codes the EU plans to stop the seizure of generic drugs passing through European ports en route to Latin America and Africa. In the past shipments of drugs, legal in the exporting and importing countries, were stopped because they were not recognised in the EU. ‘Transports in transit will no longer be checked, except for counterfeiting’, stated Mr Karel De Gucht, Trade Chief at the EU. Mr Anand Sharma, Indian commerce and industry minister, also said the dispute is over.

Outline free trade agreement agreed

An EU-India summit in Brussels, Belgium, in December 2010 has strengthened the strategic partnership between the regions and furthered free trade agreement (FTA) negotiations, said Mr Herman Van Rompuy, President of the European Council.

In a statement following the EU-India Summit President of the European Commission, Mr Manuel Barroso, said that an outline FTA has been agreed on, and a target of spring 2011 has been set for conclusion of negotiations.

‘This free trade zone will bring together markets of one and a half billion people. It will be a key contribution to the global recovery. Most importantly, it will be crucial for sustainable growth, jobs and innovation both in India and in Europe’, said Mr Van Rompuy. ‘This is indeed a win-win package for both of us!’

Over the last seven years, bilateral trade has already doubled. A stronger partnership between the world’s biggest political Union of 27 democracies—the EU and the biggest democracy in the world—India, will be welcomed, not only for its economic potential, but also its huge political potential.

Stable outlook for Indian generics in the medium term

In January 2011, consultants Fitch Ratings said ‘the outlook for Indian generic pharmaceuticals for 2011 is stable. Earnings and profitability of Indian generic-based pharmaceutical companies will benefit from continued demand for generics.’

Fitch expects the US market to be the main growth driver for the demand of generics, while the Indian domestic market will continue to remain buoyant. There is a good possibility of further interest in partnerships between global innovator and Indian generics companies.

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Source: Europa, Fitchratings, Indian Times

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