S se

Global Times US Edition - - BIZIN - By Shen Wei­duo Page Ed­i­tor: [email protected]­al­times.com.cn

In­dian drug­mak­ers, who came to the Chi­nese pub­lic’s at­ten­tion af­ter the re­lease of China’s record-break­ing film Dy­ing to Sur­vive last year, have been striv­ing to make their foray into the world’s sec­ond-largest econ­omy at a faster-thanex­pected speed.

In July, Ci­pla, In­dia’s sec­ond-largest generic drug­maker by mar­ket cap­i­tal­iza­tion stan­dards, set up a man­u­fac­tur­ing joint ven­ture to make res­pi­ra­tory drugs in China with Jiangsu Ace­bright Phar­ma­ceu­ti­cal.

Ci­pla’s EU unit, a Uk-based, whol­ly­owned sub­sidiary of Ci­pla, will hold an 80 per­cent stake in the joint ven­ture and Ace­bright will hold the re­main­ing 20 per­cent, for a com­bined in­vest­ment of $30 mil­lion.

Sun Phar­ma­ceu­ti­cal, an­other In­dian drug gi­ant, also en­tered into li­cens­ing agree­ments with China Med­i­cal Sys­tem Hold­ings (CMS) to de­velop and com­mer­cial­ize two drugs in China. Til­drak­izumab is used to treat pso­ri­a­sis and a 0.9-per­cent so­lu­tion of Cy­closporine A (CSA) is used to treat dry eyes.

Ac­cord­ing to state­ments the com­pany sent to the Global Times last week, CMS will make an ini­tial, upfront pay­ment to Sun Pharma, fol­lowed by reg­u­la­tory and sales mile­stone pay­ments, and roy­al­ties on net sales. CMS will be re­spon­si­ble for the de­vel­op­ment, reg­u­la­tory fil­ings and com­mer­cial­iza­tion of the prod­ucts in China.

An­other In­dian multi­na­tional phar­ma­ceu­ti­cal com­pany, Dr. Reddy’s Lab­o­ra­to­ries, has al­ready se­cured an early place in China. Its sub­sidiary, Dr. Reddy’s (WUXI) Phar­ma­ceu­ti­cal Co, is in Wuxi, East China’s Jiangsu Prov­ince, and its joint ven­ture, Kun­shan Ro­tam Reddy Phar­ma­ceu­ti­cals Com­pany, is also in Jiangsu Prov­ince.

In­dus­try ob­servers said they are also see­ing more In­dian com­pa­nies ea­ger to rush into China. “Many In­dian drug­mak­ers have ap­proached me through var­i­ous ways, ask­ing me to find Chi­nese part­ners for them, in the hope of gain­ing an early foothold in the Chi­nese mar­ket,” Li Tian­quan, co-founder of do­mes­tic health­care big data plat­form yaozh.com, told the Global Times on Mon­day.

While set­ting up joint ventures is just an ini­tial step, these am­bi­tious drug­mak­ers from In­dia are clearly eye­ing more, and look­ing to the op­por­tu­ni­ties that will fol­low through the years.

A Ci­pla spokesper­son told the Global Times in an email on Tues­day that its cur­rent fo­cus is on res­pi­ra­tory prod­ucts through lo­cal man­u­fac­tur­ing, while the com­pany will also “ex­plore var­i­ous routes to build a port­fo­lio of prod­ucts in other ther­a­peu­tic seg­ments such as on­col­ogy.”

“We see China as a cru­cial part of our fu­ture growth roadmap,” the spokesper­son said.

“Sun Pharma is plan­ning to ex­pand its China busi­ness in the fu­ture six to nine months, mak­ing the China unit con­trib­ute ‘some per­cent­age’ to the com­pany’s $4 bil­lion of over­all sales within three years from al­most noth­ing right now,”

Dilip Shanghvi, founder of Sun Pharma, also said in an in­ter­view with Bloomberg in May.

Time for In­dia

China’s struc­tural re­form in the do­mes­tic med­i­cal sys­tem is one of the ma­jor rea­sons these In­dian drug gi­ants are es­tab­lish­ing them­selves in China, in­dus­try an­a­lysts said.

Over past years, China has been re­leas­ing a se­ries of mea­sures to drive down drug prices, and speed­ing up ap­provals of new medicines to en­sure they can reach pa­tients and hit mar­kets quickly, in a bid to pro­vide do­mes­tic pa­tients with cheaper and high-qual­ity drugs.

Among all the rules, Li es­pe­cially men­tioned the method of con­sis­tency eval­u­a­tion for generic drugs, which was re­leased by the China Food and Drug Ad­min­is­tra­tion to eval­u­ate the qual­ity and ef­fect of generic drugs. Li said that “the method has reg­u­lated do­mes­tic generic drug prod­ucts, paving the ground for the im­ports of high-qual­ity and price-com­pet­i­tive In­dia gener­ics.”

“Pre­vi­ously, due to the lack of a uni­fied eval­u­a­tion method in the coun­try, the do­mes­tic generic drugs mar­ket was mixed. While with the re­lease of the method, as gener­ics made in China that could pass the eval­u­a­tion are quite lim­ited, In­dian gener­ics could stand out eas­ily,” Li ex­plained.

In­dia, known as the “world’s phar­macy,” is also cur­rently the largest provider of generic drugs glob­ally, ac­count­ing for 20 per­cent of global generic drug ex­ports in terms of vol­ume, ac­cord­ing to a re­port pub­lished on the web­site of the In­dia Brand Eq­uity Foun­da­tion, a trust es­tab­lished by the In­dian govern­ment.

It also has a com­pre­hen­sive range of medicines – from ev­ery­day medicine used for colds and fevers to spe­cific ones for se­ri­ous dis­eases such as an­ti­cancer drugs. In­dian drugs are gen­er­ally of good qual­ity. In­dia is the coun­try that has had the most drugs ap­proved by the US Food and Drug Ad­min­is­tra­tion (FDA) out­side of the US, with more than 100 types hav­ing re­ceived FDA ap­proval al­ready.

As such, with this in­ter­na­tion­al­lyrec­og­nized qual­ity and cheaper prices due to low la­bor costs, the South Asian na­tion will no doubt be­come a com­pet­i­tive force once it en­ters the Chi­nese mar­ket, Li said. “It’s the best time for In­dian drug mak­ers to com­pete for a place in the Chi­nese mar­ket.”

“In­dian drugs are also cheaper than those from US and Euro­pean firms, which dom­i­nated China’s mar­ket for many years,” Li added.

Pro­duc­tion costs in In­dia are 33 per­cent lower than in the US, and the cost of la­bor is roughly half that of West­ern coun­tries, a re­port from the In­dia Brand Eq­uity Foun­da­tion showed.

Mean­while, In­dia is also ne­go­ti­at­ing with the Chi­nese govern­ment for a faster reg­is­tra­tion process when im­port­ing drugs from In­dia.

Ad­di­tion­ally, the trade po­ten­tial is huge. China cur­rently im­ports a to­tal of only $200 mil­lion of medicine prod­ucts per year from In­dia, ac­count­ing for about 1 per­cent of In­dia’s to­tal ex­ports in this in­dus­try, ac­cord­ing to me­dia re­ports.

Cai Jiang­nan, the direc­tor of the Cen­ter for Health­care Man­age­ment and an ad­junct pro­fes­sor of eco­nomics at the China Europe In­ter­na­tional Busi­ness School, said that China and In­dia’s phar­ma­ceu­ti­cal in­dus­tries have huge co­op­er­a­tion po­ten­tial as they are com­ple­men­tary.

“In­dia has ac­cu­mu­lated ma­ture ex­pe­ri­ence in the generic drug-mak­ing sec­tor. It has also formed a com­pet­i­tive and in­ter­na­tion­al­ized pro­duc­tion process, as well as a ma­ture man­age­ment ex­pe­ri­ence, which China lags be­hind and ur­gently needs,” Cai told the Global Times.

For a long time, the two coun­tries’ medicine trade stood at an ini­tial level – China has been the largest ex­porter of raw medicine ma­te­ri­als for In­dia, and In­dia has been mak­ing them into drugs to sell to for­eign mar­kets.

Nev­er­the­less, with a closer re­la­tion­ship in the form of joint ven­ture, Chi­nese com­pa­nies could learn from their In­dian part­ners to per­fect and in­ter­na­tion­al­ize their drug-mak­ing abil­i­ties. In­dia also has lo­cal part­ners who could help it nav­i­gate en­try into the mar­ket, with great po­ten­tial and prof­itabil­ity, ac­cord­ing to Cai.

“There is a big op­por­tu­nity for us,” Shanghvi, founder of Sun Pharma, said. “[The Chi­nese mar­ket] would cre­ate a sig­nif­i­cant new rev­enue stream, which is not fac­tored in our val­u­a­tion when an­a­lysts look at it.”

The Ci­pla spokesper­son also talked about the growth po­ten­tial of China’s drug mar­ket, say­ing, “Res­pi­ra­tory ill­nesses fre­quently at­tack Chi­nese peo­ple, which is where our ini­tial fo­cus will be.” China’s Asthma and COPD mar­ket is ap­prox­i­mately $1.8 bil­lion in size and is ex­pected to grow to $3.5 bil­lion by 2030, Ci­pla said, cit­ing a re­port from IQVIA, a US com­pany serv­ing health in­for­ma­tion tech­nol­ogy and clin­i­cal re­search.

Nev­er­the­less, ex­perts cau­tioned that In­dia’s “suc­cess­ful but con­tro­ver­sial” generic drugs sec­tor also in­di­cates that there are lim­i­ta­tions for its co­op­er­a­tion with China.

In­dia’s strong phar­ma­ceu­ti­cal in­dus­try grows un­der the con­di­tion that generic drugs in the coun­try are not sub­ject to a patent pro­tec­tion pe­riod – a con­di­tion that vi­o­lates in­tel­lec­tual prop­erty rights and has drawn global crit­i­cism.

In April 2014, In­dia was listed as the coun­try with the worst com­pli­ance record when it comes to in­tel­lec­tual prop­erty pro­tec­tion, as noted in an an­nual re­view re­port is­sued by the Of­fice of the US Trade Rep­re­sen­ta­tive.

The two coun­tries’ co­op­er­a­tion will surely be agreed in ac­cor­dance with the in­ter­na­tional drug patent law, which means many generic drugs made in In­dia, while still within the patent pro­tec­tion pe­riod, could not come in China, Cai said. “China will never break the in­ter­na­tional drug patent law.”

Co­op­er­ate for mu­tual ben­e­fit

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.