With the new government keen on strengthening trade relations with neighbouring SAARC countries as well as with China, there is a new ray of hope for the trade relations between India and these nations. This will give a further boost to active pharmaceutical and intermediates trade between India and China.
According to McKinsey & Company report of 2013, global pharmaceutical markets are in the midst of major discontinuities. While growth in developed markets will slow down, emerging markets will gain salience in the coming decade. The Indian pharmaceuticals market, along with the markets of China, Brazil and Russia, will spearhead growth within these markets.
The Indian pharmaceuticals market will grow to US$ 55 billion by 2020 driven by a steady increase in affordability and a jump in market access. At the projected scale, this market will be comparable to all developed markets other than the US, Japan and China. Even more impressive will be its level of penetration. In terms of volumes, India will be at the top, a close second only to the US market. This combination of value and volume provides interesting opportunities for upgrading therapy and treatment levels, the report adds.
Ahead of the visit of the Chinese Foreign minister Wang Yi visit to India on June 8, 2014 Chinese Premier Li Keqiang , had expressed his government’s desire to establish a robust partnership with India.
At the same time the Indian Prime Minister , Modi had pointed out that China was always a priority in India’s foreign policy and welcomed greater economic engagement between the two countries. He underlined his government’s resolve to utilize the full potential of the strategic and co-operative partnership with China and his keenness to work closely with the Chinese leadership to deal with all outstanding issues in bilateral relations.
Currently, China and India are two strong players in the pharmaceuticals market globally. The sluggish regulated markets of the US and Europe have made the two large economies in Asia to come together to focus on a long term strategic perspective.
In 2010, Government of India and Republic of China had joined hands to strengthen the business environment between the two countries under the Strategic Economic Dialogue (SED). Under the SED umbrella, Indian government had called for greater market access for pharmaceuticals.
In an age of open economy, collaboration, integration and co-operation are the cornerstones. This is where SED, which has four working groups on infrastructure, energy, environment and high tech sectors that includes the pharmaceutical industry, could converge for collaborative growth.
Industry observers state that Indian pharma cannot ignore the market of China. While India is sound in chemistry, China has its prowess in fermentation. But the biggest advantage for India is the availability of its qualified scientific English speaking pool which allows easy submission of documentation, along with a dependable quality standard in place because of stringent regulatory clearances.
China falls short here despite its impressive and large production volume capability. The dragon land has a long way to go in terms of regulations although its State Foods and Drugs Administration (SFDA) has put in place stringent rules and norms to be adhered to. It will take a minimum seven years for China to catch up with India in document submission and in following regulations.
The two countries have the highest global population offering a market for all types of pharmaceuticals covering active pharmaceutical ingredients (APIs), excipients and intermediates, finished dosage forms including generics. There is ample scope for India and China to tap the business but it would be better to collaborate and move ahead, noted experts.
Chinese chemical synthesis is focused towards lower-end generic API products in comparison with Indian companies who have rapidly improving skill basis for new higher end generic products as well as drug discovery.
Chinese API manufacturers are less organized than their Indian API industry for supplying documentation to the client for drug master files (DMFs), current good manufacturing practices (cGMP) compliance and above all almost complete lack of knowledge of regulating affairs in the markets like the US, European Union and Japan. Chinese API manufacturers are less market- oriented in terms of presentation of their product portfolios, as well as in terms of organization of the sales network on a worldwide scale.
According to Karnataka Drugs and Pharmaceutical Manufacturers Association (KDPMA), from a global perspective, pharma majors are increasingly eyeing opportunities to outsource research and manufacture from India and China. The new stringent regulations would enable global companies to ensure the high quality standards. Now with the US FDA coming down heavily on Indian pharma companies and issuing 483 warnings, there are similar alerts issued to units in China. Even the European regulatory authority EDQM has suspended certificate of suitability COS of several drug manufacturers in India and China. But with Indian pharmaceuticals known to be 14th in terms of value and 4th in terms in volume, it has proved its expertise in areas of contract manufacture and research services (CRAMS).
What the Indian pharma badly need is hassle-free exports. The rising reliance of Indian pharma exporters on Chinese drug intermediaries is a cause for concern. Despite the fact India has been generous in clearing Chinese APIs and encouraging their presence in the pharmaceutical space, Indian companies are meted with harsh action and forced to agree on the unviable bargains for its quality products . Although the government is working on a strategy to handle dependence on Chinese intermediaries , concerns continue, said P V Appaji, director general of the Pharmaceuticals Export Promotion Council of India (Pharmexcil).
According to Anjan K Roy, managing director, RL Fine Chem and member KDPMA , the Union government needs to address the issue of ‘Export Obligations’ and take a re-look on ‘Norm Fixation’ and rationalize the registration process and fee. The API manufacturers should be given good support by the Government for manufacture of basic intermediates.
“In China, API manufacturers from India, have to go in for product registration and seek plant audits directly from the regulatory body which is the SFDA with no agent intervention. But for Chinese manufacturers in India, the products are registered through agents and do not need any plant audit. This has led to substandard products. Our government should realize the seriousness of this issue and take action immediately by putting in stringent regulations in place to ban such practices, added the RL Fine Chem chief.