It’s the age of mergers and acquisitions in the generic industry, and companies are using acquisitions as a way of increasing their market muscle and improving geographical reach. A new report, examines the significant acquisitions in the industry and forecasts which companies are shifting from single country marketing strategies through mergers and take-overs.

Generic companies have shed their image as the poor relations of the pharmaceutical industry and have become international businesses. For instance, in 2006, global sales of generic pharmaceuticals were US $77 billion. Also the leading two generic companies have both generated sufficient revenues to be described as major pharmaceutical companies.

Indian generic companies have been particularly active in acquiring smaller foreign generic companies especially in Europe and the U.S. Industry analysts have been saying that they’re potentially the most aggressive and are now able to get financial backing to contemplate the acquisition of significantly larger companies.

The largest players in India, Ranbaxy, Wockhardt and Dr. Reddy’s Laboratories, have been making targeted acquisitions since early 2006. Some examples of take-overs include Ranbaxy acquiring Romania’s largest independent generic company Terapia, Dr Reddy’s acquiring German Betapharm and Sun Pharma acquiring Israel-based Taro Pharmaceutical.

The Indian generic companies all aim to maximize their presence in non-domestic markets. Their strategy has always been to manufacture in India, where production costs are low and sell in the US and Western Europe. So acquiring a known brand in these international markets enables them access to established brands and workforces familiar with marketing strategies in these regions.