Major generic U.S. wholesalers look to India for supply

MUMBAI, India With generic drugs rising in sales, American wholesalers have decided to leap into the Indian drug manufacturing market, according to reports.

According to industry sources, wholesalers McKesson, Cardinal Health, and Amerisource Bergen have looked into at least ten pharmaceutical companies. Over the past few months, McKesson and Cardinal Health have sent executives to India to assess the capabilities of these companies, the sources said.

The U.S. is the largest generics market, with 28 percent of global generic sales. This is expected to reach $94 billion by 2010 and drugs that are worth between $65 and $70 billion will go off-patent in the next 4-5 years, according to research reports by Crisil Research and SSKI Investment.

High volumes drive the wholesale drug business in the U.S. on thin profit margins of about one percent of revenue. Supply agreements with new players will help the distributors bargain for products at prices up to almost 20 percent cheaper than what they are getting from existing Indian suppliers.