Correspondence: Vijay P. Karwal, The Royal Bank of Scotland, Healthcare Banking, 38/F Cheung Kong Center, 2 Queen's Road Central, Hong Kong. E-mail: vijay.karwal@rbs.com

¹is a Managing Director in the Asia Corporate Finance Group of The Royal Bank of Scotland (RBS) and heads investment banking coverage of clients in the Consumer, Retail and Healthcare sectors in the region, based in Hong Kong. With over 14 years of investment banking experience, Vijay was until recently Managing Director and head of RBS' North American Healthcare Banking team based in New York, USA. During his time at RBS, and previously ABN AMRO, he has been involved in a wide variety of M&A advisory and (debt and equity) financing transactions for clients in the consumer and health-care sectors with a particular focus on specialty and generic pharmaceuticals. Vijay was educated at the University of Southampton, UK, and the University of Groningen, the Netherlands, and holds a Masters Degree in Monetary Economics from the latter. He is a Chartered Financial Analyst, a member of the New York Society of Investment Analysts and the UK Society of Investment Professionals. Vijay is a regular speaker at pharmaceutical industry conferences worldwide and is a frequent commentator on developments in the sector in popular and professional media.

Received 2 June 2009; Revised 2 June 2009.

Abstract

The generic pharmaceutical sector has witnessed an unprecedented level of mergers & acquisitions (M&A) activity in recent years. Companies are engaging in merger activity to strengthen their strategic positioning in response to the changing competitive landscape in the industry. In a growing global generic market, having adequate scale and financial strength will be key attributes to manage pressure on pricing and margins, capture growth opportunities globally, establish a competitive cost base, and be able to pursue high value but high investment opportunities in niche generics and biologics. The emergence of a tier of large leading generic companies as well as the renewed interest by big pharma in the generic market are forcing industry participants to determine their strategy and role towards the consolidation trend. In an industry that remains highly fragmented, the changing market environment is expected to lead to continued M&A activity which will change the shape of the industry in the future.