Report from India - Pharmaceutical Technology

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The Asian nation is strategizing to take the lead over its regional competitors in pharmaceutical exports.


Pharmaceutical Technology
Volume 36, Issue 2, pp. 16-20

Already making gains

Generic-drug companies have historically sourced APIs from European manufacturers, explains Y.K. Hamied, chairman of Cipla. He says that several API producers based in China and India are posing a threat to the future of European API manufacturers, particularly those in Italy. He was referring to a January 2012 generics and API intelligence report by Thomson Reuters, which stated that, during the past four years, the number of Italian producers capable of supplying APIs to regulated markets has decreased. The report added that generic-drugs companies' willingness to source APIs from India and China was particularly damaging to their counterparts in Italy.

"The total market share in the world generic API market held by Italy and Spain, which are traditionally the two leading producers of generic APIs, has fallen and is forecast to further decrease. China and India could capitalize,'' says Hamied, who is quick to add that China and India are not taking over the branded API market. "European API producers still score on patent noninfringing process,'' he said.

With pharmaceuticals valued at more than $30 billion set to lose patent protection this year, Indian firms are waiting to grab the opportunity, including by teaming up with competitors in China and Japan.

Asian power

Although the Indian government has set a global export target of $25 billion by 2013–2014, intense competition closer to home as well as outside of Europe could derail the process. In a statement to the Indian Parliament on Dec. 19, 2011, India's Commerce Minister Jyotiraditya Scindia said that Indian pharmaceutical exporters were facing intense competition from China, particularly in the bulk-drugs sector and in formulations.

Double-digit growth propelled Indian bulk-drug exports past $1 billion in 2010, but China continues to hold the lead with bulk-drug exports valued at $6 billion. To close the gap, the Indian government has decided to increase sales to China and Japan.

"China is not the only threat. Japan is the second largest pharmaceutical market in the world, predicted to be worth $87 billion by 2014. The Japanese government is also encouraging generics and expects [that sector] to account for 30% of its market share by 2012. We will have to explore new markets other than the US and Europe to meet the $25 billion export target,'' says N.R. Munjal, president of the Indian Drug Manufacturers' Association.

At the association's golden jubilee celebration held in Mumbai on Jan. 7, 2012, Rajeev Kher, a secretary in the Ministry of Commerce, said that Japan had opened its generic-drug market to the Indian drug industry. "The Indian industry needs to draw a plan based on regulatory mechanisms to tap that market efficiently.'' He added that India is set to enhance its global image at the forthcoming CPhI–Japan conference taking place in March in Tokyo.

Deepak Chander, business director at DSM Anti-Infectives India, is of the opinion that competition need not be labeled a threat. DSM has three plants in China that are manufacturing intermediates and antibiotic APIs, and has sales of $1.5 billion in China. The company has a plant in Toansa, Punjab, as well.

"Big Pharma trusts Indian firms to make the intermediates and APIs for even their most sensitive new products. We should think of this as an opportunity,'' says Chander. Pursuing this course would ensure an accelerated growth path for India, thereby enabling it to break into the top tier of the global pharmaceutical market.

A. Nair is a freelance writer based in Mumbai.


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