THAT US drug maker Merck & Co has entered into a co-promotion deal with local pharmaceutical firm Adcock Ingram should be no surprise. With increasing price and regulatory pressure in North American and European markets, multinational pharmaceutical companies have begun pursuing deals with generic drug makers in emerging markets. Two years ago, Japan's Daiichi Sankyo acquired a majority stake in India's biggest generic drug maker, Ranbaxy. UK-based GlaxoSmithKline has tied up with Africa's biggest generic drug maker, Durban-based Aspen Pharmacare. Faced with growing competition from generic drug makers, more and more blockbuster drugs reaching the end of their patent life, and a dwindling product pipeline, the multinationals have sensibly tried to broaden their global exposure with deals of this kind. The numbers say it all: research company IMS Health forecasts that emerging markets will grow at 14%-17% through to 2014, while markets in North America and Europe will grow at just 3%-6%, reversing the pattern of the past five years.

Nick Wilson: The Bottom Line: Business Day, 25 June 2010