In the competition between Chinese and Indian bio-pharmaceutical manufacturers, China takes over generic drug industry and leads in API production, while India supplies more finished generic drugs. What will China need to do to compete with India?
China’s API Production
In 2012, China became a world leader in active pharmaceutical ingredient (API) manufacturing. China’s API production capability supplies generics markets around the world. Although emerging markets greatly rely on China’s production, there are important factors that Chinese companies must address if they are to maintain a competitive edge for generics over other emerging countries, namely India.
China’s vs India’s Generics
According to the China Food and Drug Administration, or CFDA, generics account for over 95% of chemical drugs produced in China. Despite a large generic drug industry, China is still falling behind other emerging countries. China’s biggest competitor, India, currently the number one provider of generics to the developing world and is also gaining momentum in Western markets. This may be due to the fact that only a few Chinese companies have WHO approval for Good Manufacturing Practices (GMPs). Even less have pre-qualified generic products to supply international organizations. India pre-qualified for 268 medicinal products in 2012, compared to China’s eight. These numbers have only grown further apart: India pre-qualified for 355 more recently, while China for only eighteen.
Is English Holding China Back?
While emerging countries as well as the West are relying heavily on India for generics supplies, China is looking to India for ways to better enter the global generics market.
Many Chinese companies are hiring experienced Indian pharmaceutical executives, offering them two to three times their current salaries. The reason for this is that Indian manufacturing professionals have two very desirable skills: drug formulation experience and English proficiency. In India, not only is English an official language, but it is also the language in which much of business is conducted.
Although China has made great strides in increasing English proficiency, communication barriers persist and can interfere with successful collaboration.
How China Can Reach its Potential
What is holding China’s generic producers back? China has introduced significant regulatory changes in an effort to bring its pharmaceutical industry in line with international standards. These include the reorganization of the former SDA to create the SFDA modeled after the US FDA, amending drug regulation and good manufacturing practice (GMP), enhancing intellectual property protection and changing drug import licensing. But in order for China to compete globally in generics production, several factors must be addressed:
- Lack of technical training and monitoring has resulted in product variability.
- GMP implementation initially caused an overload of applications which has resulted in the approval of under-qualified companies.
- Back log of applications following stricter controls has bogged down the approval process – more than 10,000 generics applications are awaiting CFDA review.
- China requires clinical trials rather than a review of trial results (like the US FDA) thereby lengthening the approval process for generics.
- Longer approval times due to low numbers of CDFA staff to Chinese companies.
- Inadequate regulations for control groups in bioequivalence studies on locally produced generics.
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