Observers have been absorbing the news of Daiichi Sankyo's bid to take control of Ranbaxy for up to $4.6 billion and the effect that the deal could have on big pharma's attitude to acquiring generic companies in general and Indian firms in particular.

The major drugmakers, "after a decade of exiting the generic business, may be exploring potential reentry into this space as they face pressure in their core branded portfolios," Tim Anderson, an analyst with Sanford Bernstein, said in a research note. He claimed that generics would enhance branded drug companies' growth prospects "across multiple geographies, and would allow them to have a complete offering to payers of both branded and generic products".

The deal could set in motion a wave of consolidation in the generics industry and analysts at Cowen & Co said that Mylan and Barr Pharmaceuticals, US firms which have bought companies of late to expand abroad could themselves become targets. However they say that Israel's Teva Pharmaceutical Industries is more likely to be an acquirer.

The attraction of getting into generics is considerable at a time when big pharma is starting to suffer from patent expirations which are ravaging profits and a hostile economic environment which is seeing governments making a reduction in healthcare costs a priority. Daiichi Sankyo's move is being applauded by observers who note that the firm will be extremely well-placed to take advantage of plans in Japan to make generics more widely available.

Also the deal has drawn attention to the attractiveness of the Indian pharmaceutical industry. The Daiichi Sankyo/Ranbaxy agreement could lead to interest being shown in some of the sub-continent's other major players, such as Dr Reddy's Laboratories, Zydus Cadila, Cipla, Wockhardt and Sun.