London: Global pharma giant GlaxoSmithKline is eyeing acquisitions worth $2 billion in India, the world’s fastest-growing drug market, media reports said.

GSK corporate HQ in Brentford, Middlesex, UK. Photo: Bloomberg

GSK, which employs 5,000 people and has turnover of more than $1 billion in India, was, however, unlikely to pursue large-scale merger and acquisitions, and was unwilling to overpay for companies, the report said.

“We already have an enviable brand in India so there is no need for us to pay a strategic premium," he said.

“Others might need to do that, but we don’t."

Witty received plaudits in 2009 for slashing the price of medicines that GSK sold in the developing world and, most radically, for offering to share knowledge about some of its potential drugs that are protected by patents.

Overall, GSK’s drug sales in emerging markets grew by 22% last year to £3.6 billion, while profits swelled by nearly a third.

The country’s pharmaceuticals market is worth £5.8 billion a year, making it the eighth largest in the world.

Between 2010 and 2015 it is expected to grow by 15.7% a year as newly affluent Indians spend more on healthcare, boosted by annual GDP growth of nearly 8%.

The government has also pledged to raise its overall spending on healthcare, which stands at only 1.2% of GDP, making it among the lowest in the world.

His comments come amid commerce and industry ministry seeking the Prime Minister’s intervention in regulating FDI into pharmaceutical companies, as it is concerned over a large number of acquisitions of Indian drug firms by MNCs.

The ministry fears that a spate of acquisitions by MNCs would create “an oligopolistic market with large companies working as a cartel".

The health ministry has also suggested that the FDI be capped at 49% in the pharmaceutical sector, fearing that acquisitions would increase the prices of generic drugs.

At present, 100% foreign direct investment (FDI) through automatic route is allowed in the pharma industry.

According to the report, Witty reserved strong criticism for Indian proposals to tighten controls over mergers and acquisitions in the country’s pharmaceuticals industry.

He said that the plans, which are being formulated by Delhi and would include a right of veto over foreign acquisitions, would represent an “extremely retrograde step" that would damage foreign investment in drug research and development in India.

“It’s critical in terms of moving Indian pharmaceuticals up the value chain that you get a blend of the strengths of the local businesses with the global companies. If one side isn’t allowed to have influence or control, they are just not going to invest here.

“Why would you? There is a significant long-term loss there for the government."

He dismissed other concerns about the difficulty of conducting business in India, including a lack of control over intellectual property, a dysfunctional judiciary and widespread corruption.

“Yes, there are lots of challenges," he said, “but you can still grow a business here in the same way that you can in any country in the world."