Intra-Asia trade: India looks to China in ‘beginning of new phase’

By Ben Hargreaves contact

- Last updated on GMT

(Image: Getty/Bank215)
(Image: Getty/Bank215)

Related tags: India, China, Joint venture

Indian’s pharma industry has a growing interest in the Chinese market, as regulatory changes ease entry onto the second largest market in the world.

According to GlobalData​, the Chinese pharmaceutical market is due to increase in value from $132bn (€118bn) in 2018 to $209bn (€187bn) by 2022.

China already the second largest market in the world after the US, with the market’s expansion being driven by an increasing elderly population, greater public insurance coverage, and regulatory reform.

Indian pharma companies are now seeking to tap into this growth by growing their presence on the Chinese market, GlobalData suggests.

This has seen Indian companies set up joint ventures (JVs) in the country to facilitate entry into the market and sell their treatments through these newly established companies. Examples of companies that have taken such an approach are Aurobindo, Alembic Pharma and Dr Reddy’s.

The report notes that despite having a presence in the country for two decades, Dr Reddy’s has still only achieved limited success within the market due to the complexity of country’s medical regulations.

However, Prashant Khadayate, practice head of healthcare at GlobalData, explained that the situation is changing in China, as citizens are applying pressure on the Chinese pharmaceutical industry over the cost of cancer treatments and generic drugs.

This has led to the adoption of ‘favourable regulatory policies’, Khadayate said, which have encouraged the entrance of Asian companies, such as Celltrion​, and Western companies​ onto the market.

The regulatory reforms have cut approval timelines for companies based outside of China and have promoted the purchase of generics through a bulk procurement scheme. Khadayate noted that this has seen a number of Indian companies set up JVs in the last six months to reap the benefit of the changing landscape.

In terms of what Indian companies could bring to the local market, Khadayate explained that “Indian companies can help in improving the affordability and accessibility of the quality generic drugs for Chinese patients, mainly from the export perspective.”

There are still barriers to entry for Indian companies, with issues in exporting drugs to the market and an ‘unclear roadmap’ from Chinese authorities that may hinder progress, Khadayate noted.

Despite these factors, he concluded, “It is just the beginning of a new phase where a majority of the prominent Indian companies are looking towards the China market.”

Related topics: Globalisation, Regulatory & Safety

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