The smaller generic drugmakers, struggling to cope with a bruised reputation and tougher regulation in the United States, are under pressure to consider branching out to new, less-profitable markets or sell out to larger rivals.
Two years after its most high-profile regulatory setback to date in the United States - Ranbaxy 's $500 million US fine for drug safety violations - India's $15 billion a year generic drug industry is still rebuilding its image in its biggest market.
Many of its top firms are facing sanctions at some of their factories, as the US Food and Drug Administration (FDA ) tightens checks and its approvals process.
Combined with government-mandated price controls on drugs at home, that is piling pressure on smaller players.
"If they want to have a presence globally, they have to make investments. If they can't, then they'll have to focus on other markets or scale back their ambition outside of India, and that's probably what will happen," said Subhanu Saxena, CEO of Cipla, country's fourth-largest drugmaker by revenue.
Ashok Anand, president of Hikal Ltd, a Mumbai-based drugmaker with a market value of $167 million, said some peers were putting themselves on the block.
"If they cannot deal with the stricter regulations, they might just prefer to sell out," he said.
Pressure on US sales has been felt across the industry, with all drugmakers hit by delays in FDA approvals as the US safety body overhauls its review process. Growth in US revenue for drugmakers slowed to 14 per cent in the year to March 2015, less than half what it was in the year to March 2012, according to brokerage Edelweiss.
But for larger players who want to plug gaps or, for the likes of Glenmark and Aurobindo who aim to grow in the United States, this pressure has lowered prices and could pave the way for attractive deals, bankers said.
"Now that some of the smaller companies are reeling under intensive regulatory scrutiny and want to cash out on their investments, valuations would be much more realistic," said the head of India M&A at a large European bank in Mumbai.
Manufacturers say they have spent millions in high-end testing equipment, improved training and have hired larger teams in quality control since Ranbaxy was fined for manipulating clinical data.
Some consultants estimate spending on compliance has more than doubled to reach about 6 to 7 per cent of sales for the larger companies.
But while the number of US export bans issued to Indian companies fell to eight in 2014 from 21 in 2013, according to FDA data, the agency continues to find manufacturing violations at the plants of some of the biggest drugmakers in the country, an indication of the pervasiveness of the problem.
Sun Pharmaceutical Industries, Wockhardt, Dr Reddy's Laboratories and Cadila Healthcare have all faced FDA rebukes over the past year.
Smaller firms Ipca and Aarti Drugs faced FDA bans on their plants this year.
These failures - which executives blame on "quick fix" culture and consultants blame on a failure to prioritise compliance - have clouded short-term growth prospects and added to pressure on smaller players, pushing some to look elsewhere.
"They can choose to be in lesser-regulated markets, such as Latin America, where there is a lot of demand. But they will have to live with much thinner margins," said the finance director of a small drugmaker, who did not want to be named. "It's survival of the fittest."