16 Aug 2018
in Press Release
US-China trade war offers window of opportunity for Indian pharma sector, says GlobalData
The ongoing US-China retaliatory trade war, under which both the governments are slapping punitive tariffs on various imported products from each other, provides a window of opportunity for the Indian pharma firms to penetrate the Chinese healthcare market and reduce trade deficit, says leading data and analytics company GlobalData.
On 4 May 2018, China announced the removal of import duties on 28 medicines, including cancer medicines, thereby potentially opening up the Chinese market to Indian pharmaceutical products.
Vikas Bedi, Head of APAC Healthcare Research at GlobalData, opines: “This exemption may not be India specific but Indian pharma companies can benefit from this move as they are already manufacturing and marketing many of the required products at significantly lower prices and with high quality.”
India is the largest manufacturer and supplier of generic drugs globally. Eight out of the top 20 global generic drug companies are located out of India. The country is ranked third by volume and 10th by value in pharmaceutical exports according to Pharmaceutical Export Promotion Council of India (Pharmexcil).
However, a huge trade gap exists between the two nations as only about 1% of Indian generic exports are shipped to China but nearly 80% of the active pharmaceutical ingredients (APIs) requirements of India by volume are imported from China despite the cost of manufacturing in India being almost the same as in China.
Based on the data available from India Brand Equity Foundation and Pharmexcil, GlobalData forecasts the Indian pharmaceutical market to grow from $38bn in 2017 to $55bn in 2020. At the same time, GlobalData estimates the Chinese pharmaceutical market, the second largest after the US, for western medicines, to rise from nearly $195bn in 2017 to $435bn by 2020, based on the data available from the China Statistical Yearbook of the National Bureau of Statistics of China.
So far, most of the Indian pharma companies have exhibited subdued enthusiasm given the challenges involved in gaining entry to Chinese market. Regulatory challenges in terms of lengthy clinical trials and delayed approvals are cited as major barriers.
Bedi concludes: “China and India need to work out a specific bilateral framework to assuage the concerns of the Indian pharma industry. The Chinese government agencies have sought to assure the Indian authorities of accelerating drug approval process and provide approvals within 12 months.
“This move can provide the much needed boost to Indian pharma exports to China and provide a US-like opportunity to Indian pharma companies. It could be a win-win situation for both India and China as China can gain access to affordable, high quality pharmaceutical products and save significant amount of healthcare costs while the Indian companies can reduce their dependence on the US where they are already faced with regulatory and pricing pressures.”
Analysts available for comment. Please email the GlobalData Press office at firstname.lastname@example.org.