Posted by: Bruce Einhorn on December 12, 2006
You might think that India’s pharmaceutical industry would be one business where locals needn’t fret too much about competition from China. While China has no big-name drugmakers with significant presence beyond the People’s Republic, India’s pharma industry is one of the country’s great success stories. Companies like Ranbaxy, Dr Reddy’s and Cipla are recognized worldwide for their high-quality, low-cost products. The Indians have helped revolutionize the world’s generics industry and some companies are trying, albeit with mixed results, to become players in the risky world of new drug discovery.
Still, the Indians are worried. See this story from the Business Standard newspaper, “Chinese drugs pose threat to Indian pharma.” The Chinese may not be in the same league as the Indians when it comes to producing finished drugs for use in the West or in the developing world, but reporter Joe C Mathew points out that China’s manufacturers of bulk drugs are going to town against their Indian counterparts, with prices for many Chinese-made antibiotics so much cheaper that some local drugmakers are giving up. “Indian companies are finding it impossible to arrest the trend as the imported drugs are of the same quality and brought in through legal channels,” writes Mathew. Smaller companies as well as more well-known names are both feeling the pinch, the paper reports, and some companies are shutting down bulk-drug production in India because of the Chinese onslaught.
If you’re an exec at Ranbaxy or Dr. Reddy’s and you want to look on the bright side, I suppose you could say that competition at the low end will provide even more incentive for Indian companies to move aggressively into the development of more advanced drugs. So far, that’s an area where the Indians have a clear lead. But how long do they have before the Chinese start becoming a threat there, too?