Should the Indian govt squeeze foreign acquisitions of its drug companies ?

A Wall Street Journal article (Sept 27, 2011) describes worries by the Indian govt regarding the future impact of foreign acquisitions of its local drug firms – Abbot buying Piramal Healthcare and Daiichi Sankyo buying Ranbaxy Labs Ltd. The worry is that the growing Indian generic manufacturers will be replaced by higher cost drugs both in Indian and abroad.  How should US drug firms respond to the low prices set by Indian generic manufacturers – buy them or establish supply arrangements for global demand ? Given a growing Indian market, with an associated price point, would it be optimal for a foreign owner to raise prices in India and thus hurt demand ? How would potential intellectual property concerns of global firms be alleviated by ownership of drug firms in India ?

About aviyer2010

Professor
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