China's Generic Drugmakers Challenge India (China)

Executive Summary

China's stronger protection of intellectual property is helping that nation's pharmaceutical industry challenge India in an industry India has traditionally dominated. Beatrijs Van Liederkerke, a director at PricewaterhouseCoopers who tracks the pharma industry, cites Pfizer's victory in the Chinese courts after generic drug makers tried to get its Viagra patent overturned as evidence. "It gives confidence to the multinationals that IP is protected and that the right laws and regulations are in place." A stronger legal framework combined with skilled scientists and government incentives are turning China into a pharma powerhouse. Drug multinationals are building R&D centers in the country with one eye on a domestic market that will be the world's sixth largest by 2010. New guidelines put forward in 2004 by the U.S. FDA allow for new production methods based on principles rather than the old checklist method of approvals, allowing for more creativity in production methods as long as they remain safe. The new manufacturing process will play up to China's traditional strengths, while India has been reluctant to switch over. "Once [China's pharma industry] grasp the idea they will be ahead of the Western pharmaceutical companies," said Van Liedekerke. "If there is one company that does it, it's going to go quickly." Cost efficiency has allowed China's pharma industry to become a major player in the production of important active ingredients. India's generic manufacturers are well aware of China's strength and are seeking to capitalize on it by building partnerships in the country. Despite China's massive potential in the medical materials market, it is unlikely to expand its scope so quickly that it threatens India's generic drug business. "There are 72 facilities in India that have been FDA inspected and FDA approved whereas in China this has recently happened for one product in just one company," said Van Liedekerke. "The Indian market is a lot more mature than the Chinese market, although the Chinese market is catching [up]." (Click here for more - May Require Paid Subscription