Winning a tender last month to supply olanzapine to public hospitals in China, Dr Reddy’s Laboratories (DRL) became the first Indian company to export generic drugs to the Asian giant. However, investors did not react to the development — and for a reason.For most other Indian pharmaceutical companies venturing into China, the market is restricted to the licensing of speciality products, with monetisation being two to three years away.China’s move to reform its drug laws and facilitate faster approvals for generic drugs has provided hope for Indian pharma companies. Incidentally, India is increasingly importing bulk drugs from China.China has been investing heavily in biologics and biosimilars — the next generation drugs. The country is also investing in new technologies like installing cold chain storage and continuous processing.The only significant area where the Chinese industry is lagging behind is finished drugs in solid dose forms.Through partnership with Indian companies, Chinese drug firms are keen on acquiring expertise and capability to locally manufacture generic formulations.Given these factors, scaling up, integration with the Chinese partners and monetising the opportunity will be challenging for Indian companies. In the near term, the US market shall continue to provide the lion’s share of business for Indian drug makers.

Source: Economic Times October 10, 2019 03:00 UTC