Global pharma consultants caution India on Chinese threat in generic drugs

Nandita Vijay, Bengaluru - Pharma BIZ Tuesday, December 27, 2011, 08:00 Hrs  [IST]

Indian pharma industry needs to keep cognizant of the China's capability in the production of generics. As the dragon country is known for its huge manufacturing capacity embedded with the advanced technology, there is every chance that Indian pharma companies could fall behind going the growing Chinese threat, according to global pharma consultants. Although in the current context India is known for its quality standards and delivery timelines, the Indian pharma industry cannot rest on these laurels.  Among the BRIC (Brazil, Russia, India and China) nations, China is already far ahead of the rest. The Chinese market grew at 20 per cent in 2010 compared to 11 – 15 per cent in others. Incremental growth of pharma market estimated at $ 40 billion by 2014 compared to $5 -$15 billion in other countries. With public private partnerships, Chinese GDP  was $9 trillion in 2009 compared to $2-4 trillion in others. In fact, China offers products at prices 5 -15 per cent lower than the other BRIC countries. The Chinese government directly and indirectly plans funding of $125 billion in the next five years, stated the consultants who were in India for the 63rd Indian Pharmaceutical Congress (IPC) held in Bangalore last week. Multinational companies like Merck, GSK, Novartis, Bayer, Johnson & Johnson, Sanofi and others have slated foreign direct investments (FDIs) to the tune of billions of dollars into R&D in China, apart from outsourcing. “There is a stealthy and surreptitious watch over India by pharma companies in China. Just like how they swayed their supremacy in India for the sale of active pharmaceutical ingredients(APIs), leaving the domestic players in the fray, the same could happen in the area of generics,” Dr Vinod P Shah pharma consultant, USA told Pharmabiz. Currently Indian pharma cannot clutch contract manufacture and research orders based on cost-effectiveness and quality, there needs to be concrete efforts in drug development, focus on organic chemistry synthesis and   strong intellectual property (IP). China has already made inroads in new drug development and is way ahead of India in production of biotech drugs on a large scale. A number of presentations in the US made by the companies chiefs from pharma majors in China are a clear indication that they are much ahead of India, he added. However, on the negative side of the Chinese success story does point out to scores of quality issues, difficulty in comprehending and communicating in English which could stall growth at a slower pace. Indian pharma needs to capitalize on the inherent strengths in chemistry, technology and manpower and without cutting corners on quality and safety be able to face the Chinese onslaught in the generics opportunity space, said Dr Shah. Besides addressing the supply of generic drugs to the global markets ensuing out of the patents worth $60 billion expiry by 2012 offering a market of $73 billion opportunity in the space, we need to arm expertise in the area of synthetic and bio-generic drugs, look more closely at the development of alternate systems of medicines and gear up for back office for IP related and regulatory submissions, stated Dr Samba Reddy, pharma consultant in US.