However, many pharmaceutical companies have remained very cautious about the Indian market, primarily because of problems
surrounding intellectual property protection. For example, Novartis was denied a product patent for "Gleevec" (imatnib mesylate)
and, in March 2008, the Delhi High Court rejected an injunction plea by Roche to prevent Cipla (Mumbai) from selling generic
copies of Roche's "Tarceva" (erlotinib).
Figure 2: The number of final abbreviated new drug application (ANDA) approvals belonging to groups headquartered in India
and the number of Indian groups holding final ANDAs, 1998–2007.
Several North American and European generics companies, among them Watson (Corona, CA) and Sandoz, have established a dose-manufacturing
presence in India. Sandoz's Indian dose-manufacturing facilities include three sites in Maharashtra: an antituberculosis drug
plant in Kolshet, a cephalosporin plant in Turbhe, and an oral solid-dosage plant in Kalwe. In 2005, Watson acquired from
Dr. Reddy's (Hyderabad) an oral solid-dose manufacturing facility in Goa. To date, only a few foreign generics companies seem
to be eyeing the Indian drug market. Although Mylan (Canonsburg, PA) gained presence in the Indian dose market through the
acquisition of Matrix (Secunderabad), we believe the main impetus behind the acquisition was to access to Matrix's API and
finished-dose manufacturing capabilities.
There are a number of reasons why generics players have shied away from entering the Indian market with their dose products.
Major challenges include the large number of local generic-drug manufacturers with access to inexpensive APIs, intense price
competition, and the need for considerable marketing presence.
China. The Chinese pharmaceutical market is currently estimated at $12 billion and growing at double-digit rates (4). By 2010, China
is expected to be the fifth largest pharmaceutical market after the US, Japan, Germany, and France. As the world's most populous
country is getting wealthier, the awareness of diseases and treatments is improving and more people have access to medicines.
Together with improving living standards, the rates of Western diseases such as heart disease and cancer, also have been increasing,
contributing to increased demand for pharmaceuticals.
Major pharmaceutical companies such as Abbott (Abbott Park, IL), AstraZeneca, and Boehringer Ingelheim (Ingelheim, Germany)
have been marketing their products in China for several years, however, even the largest companies have not penetrated all
the corners of this vast country. Earlier this year, for example, Pfizer announced that it will be increasing the number of
Chinese cities that it serves from 110 to more than 650. To reach the smaller cities and rural areas, pharmaceutical companies
must expand their distribution networks and hire hundreds or even thousands of sales people.
Several foreign generics companies, among them Stada, Actavis, and Teva, also have been marketing their finished-dose products
in the Chinese market for a number of years. For example, Teva inherited a presence in the Chinese generics market through
the acquisition of Sicor (Irvine, CA) and Ivax (Miami). Both Sicor and Ivax had established joint ventures with Chinese partners,
Tianjin Pharmaceutical Holdings and Kunming Pharmaceutical Factory, respectively. Meanwhile, Sandoz acquired a generic-drug
manufacturing facility in the Guangdong Province at the end of 2007. The facility used to belong to Grünenthal and is reportedly
already supplying products to major Chinese cities. This is Sandoz's second facility in China. As a result of acquiring Hexal
(Holzkirchen, Germany) in 2005, Sandoz inherited Hexal's facility in Tianjin.
In addition to competition from local generics players, accessing distribution channels and reaching different corners of
China are only a few of the major challenges facing generics companies interested in the Chinese market. In China, many companies
focus only on one province, so partnering with those companies would not necessarily help a foreign company penetrate this
fragmented market. Generics companies also must keep in mind that not all drugs have been approved in China, so clinical trials
may be required before a particular generic drug can be introduced in the Chinese market.