Selling APIs from regulated
markets into India and China
Do India and China represent growing markets for active pharmaceutical ingredients from
western markets? Kate Kuhrt outlines the surprising trade in APIs imported into these
developing countries
With the pharmaceutical markets in India and substance facility in the US. China, however, does
China expected to continue to grow at double- not have these obvious gaps in technology.
digit rates, while traditional pharmaceutical
markets, such as the US, Japan and Western
Manufacturers based in India
Europe, remain stagnant, it is no surprise that
and China continue to enjoy a
many API manufacturers have set their sights on
cost advantage over their Western
India and China. When evaluating opportunities in
counterparts, despite the fact
new markets, API manufacturers have to analyse
that costs in both countries
both the supply and demand for particular active
ingredients in the target country and be able to
are increasing
navigate the regulatory landscape.
On the demand side, signifi cant opportunities to
Since both India and China are hotspots for API
sell APIs into India stem from an increased amount
manufacturing, any producer looking to sell
of fi nished-dose products for regulated markets
APIs there must be prepared to compete against
that are manufactured in India, either by Indian
local manufacturers, cheaper imports from other
companies, Indian manufacturing arms of overseas
emerging markets and regulated market players
40
companies or by toll manufacturers. Almost
who have set up a manufacturing presence in the
30 Indian corporate groups sell their fi nished-
two countries.
dose products in the US market. Meanwhile, an
Manufacturers based in India and China often
increasing number of Western dose manufacturers,
continue to enjoy a cost advantage over their
including Watson, Sandoz and Mylan, have set up
Western counterparts, despite the fact that costs
manufacturing facilities in India. Companies such
in both India and China are increasing, as salaries
as Stada, Teva and Sandoz also have fi nished-dose
go up, energy becomes more expensive, and there
manufacturing presence in China.
is more emphasis on regulatory and environmental
compliance. Nevertheless, we believe that there Chinese demand
are commercial opportunities to sell APIs from
However, to date, China has not been a signifi cant
regulated markets both into India and China.
player in manufacturing fi nished-dose products for
regulated markets. That does not necessarily mean
Technology gaps
that there are no opportunities to sell regulated
Some of the opportunities to sell APIs into India market APIs into China; it simply means that
stem from the country’s gaps in API manufacturing API manufacturers must keep the Chinese dose
technology. Few Indian companies are strong in market, rather than regulated dose markets, in
fermentation, and even those with the capability mind when identifying potential opportunities. For
usually have a relatively small capacity. There is also example, there is tremendous need in China for
an insuffi cient amount of steroid manufacturing, new products, both in terms of new molecules and
and the narcotics industry is quite weak. enhanced versions of existing products.
Over the past few years we have seen Indian Companies looking to sell their APIs into these
companies making overseas acquisitions to try to two countries must get the necessary regulatory
bridge some of these technology gaps, for example, approvals. In India, the manufacturing sites of
Strides Arcolab bought Diaspa’s fermentation foreign manufacturers and individual APIs that
facility in Italy, and Sun bought Chattem’s controlled are imported have to be registered with the
Scrip World Pharmaceutical News Supplement August 2009
cphi.com | icsexpo.com | p-mec.com | bioph-online.com
wherepharmameets.com | scripnews.com
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