A nice overview in the New York Times on the growing drug industry in India; our recent purchase in Dr Reddy's Laboratories (RDY) gets a mention.    While a positive for the world and especially India, we read these stories week after week after month after month (years on end), and one needs to remember the effects for the U.S employment picture as more and more of the world's production moves away.   First goes production (it's only low end work no American wants to do!) then high(er) end production, then goes much of the support operations (accounting for example), then the R&D (which is the stage we are currently in), and in the end you will have a hollowed out company with only the execs still in the U.S.  The same execs of course requesting tax cuts to keep their business in the U.S. ;)  Ah, progress!

It is difficult to have a service economy when you are moving to an end point in 20-30 years where you will make little outside of weapons, and movies.   In the nearer term it is just of one of thousands of stories that explains the structural unemployment situation we have and why the country is now dependent on a bloated healthcare system, bloated government and house churning as its main industries. Of course the former 2 are bleeding the country from the inside with debt since its mostly just transfer payment from the dying private sector to the pseudo and pure public sectors.  But I digress! Go India.

  • Below an ancient hilltop temple to Kali, the Hindu goddess associated with destruction and change, Sun Pharmaceutical Industries churns out generic versions of cancer drugs and epilepsy medications bound for the United States.  Business is so brisk that Sun, with revenue of 41 billion rupees ($880 million) last year, predicts sales will grow 20 percent this year and is expanding its Halol factory. 
  • India's drug industry — on track to grow about 13 percent this year, to just over $24 billion — was once notorious for making cheap knockoffs of Western medicines and selling them in developing countries. But India, seasoned in the basics of medicine making, is now starting to take on a more mainstream role in the global drug industry, as a result of recent strengthening of patent law here and cost pressures on name-brand drug makers in the West. 
  • And while the Indian industry has had quality-control problems, it nonetheless benefits from growing wariness about the reliability of ingredients from that other historically low-cost drug provider — China. The United States is India’s top export customer for drugs. 
  • India is becoming a “base for manufacturing for the global market,” said Ajay G. Piramal, the chairman of Piramal Healthcare, a drug maker based in Mumbai. Eventually, in Mr. Piramal’s perhaps overly optimistic forecast, only the very first and very last steps of the business — molecular drug discovery and marketing — will be run by the West’s global drug giants.  (good point, we'll still have marketing in the U.S. ... sales still needs to be done face to face.  Hence there will always be a market for attractive young(er) ladies to sit in offices of doctors to upsell their drugs)  It is not only Indian executives, though, who are bullish about the pharmaceuticals industry here. Analysts, research groups and consultants have been making similar predictions in recent months.
  • Daiichi Sankyo of Japan helped kick off the foreign drug push into India in 2008 by buying a stake in Ranbaxy Laboratories, this country’s biggest drug maker. Last year, among other deals, GlaxoSmithKline formed a partnership with Dr. Reddy’s Laboratories; Pfizer tied up with Claris Lifesciences; Sanofi-Aventis took control of Shantha Biotechnics, and Bristol-Myers Squibb opened a research center in India with Biocon.