Indian pharma cos need to focus on innovation & complex generics: Sudarshan Jain
Synopsis
"Open up pharma market, it will be win-win for Indian companies as well as China."
By ET Now
It is still early stage in terms of a regulation. We have to go a long way and it will benefit China because their patients will be able to get many of the drugs at economical prices, says Sudarshan Jain, Senior Advisor, Apax Partners LLP. Excerpts from an interview with ETNOW.
The Indian government has been working with China. Also many of the large companies have been working with China. It is still early days. We are trying to simplify the regulatory measures. One of the measures which has been talked about is if drugs are imported from India in smaller quantities, they will be not counted as fake drugs. But that does not sort the problem out. Indian government has been saying to China that patients will benefit significantly if imports of the Indian formulations are allowed. If the drug is approved and fresh, why do you need additional clinical trials in China? Why do you want to go through the whole process which will take a huge amount of time? Second, the Chinese government is asking us to set up the manufacturing facilities in China.
When any new manufacturer goes to China, he has to study and build the market. If the market is of a particular size, naturally the company will be interested in setting up a manufacturing facility. So it is still early stage in terms of a regulation. We have to go a long way and it will benefit China because their patients will be able to get many of the drugs at economical prices.
If this indeed actually comes about and they liberalise the norms, do you think Indian pharma companies can actually start drawing plans to address the Chinese export opportunity because we have been making a case for better trade relation in the pharma front with China for some time now?
Yes it is very important that China should open up the market because we have been allowing API manufacturing in India without insisting that the manufacturing plant has to be set up. China should also respond by setting up manufacturing facilities in India and they should allow Indian exports to China which will benefit their patients.
Till now, despite a lot of trials, the China opportunity has been very farfetched. Do you think it is set to change in the coming years?
Yes, if they start opening up their market, it will benefit Indian companies as well as China. In fact, Indian companies are very keen to enter the Chinese market which will benefit Chinese patients. In fact, Sun Pharmaceutical bought a company recently; Dr Reddy’s has been there in this market for a period of time and there are multiple manufacturers. Natco is trying to market their products there. Other companies will start examining and evaluating Chinese markets once they open up and Chinese patients will benefit immensely.
You work closely with so many companies and you have of course, been the MD of Abbot. Could you help us understand what is the size of opportunity as far as China goes and what are potential areas where Indian companies can work closely with China?
China is the second largest market. I do not remember the figures right away. Our imports to China are very limited. We export around $5.5 billion to US while exports to China may not be more than $400-500 million. It is too small at the moment. But from the Chinese point of view, it will benefit greatly because for many of the products which they are importing from other parts of the world, the cost will go down if they start importing from India.
Can China become one of the biggest markets for us as well?
It can if they open up the market. It is still early days and the steps which have been taken which are too small at the moment. We have to go a long way.
As regards the business that we do with the US, can regulatory and pricing pressure issues ease out from here for Indian companies?
Very difficult to say but maybe it will not be to an extent which has been happening in the last three years. There is relatively more stability in the market but it is very difficult to say that it is over. As far as Indian companies are concerned, we need to focus more on innovation and complex generics.
ADVERTISEMENT
There has been news reports on how China is easing rules on cheap drug imports to fight chronic diseases. We export some $20 billion worth to US and China is as big a market in size as the US. But does it translate into opportunity for Indian exporters?The Indian government has been working with China. Also many of the large companies have been working with China. It is still early days. We are trying to simplify the regulatory measures. One of the measures which has been talked about is if drugs are imported from India in smaller quantities, they will be not counted as fake drugs. But that does not sort the problem out. Indian government has been saying to China that patients will benefit significantly if imports of the Indian formulations are allowed. If the drug is approved and fresh, why do you need additional clinical trials in China? Why do you want to go through the whole process which will take a huge amount of time? Second, the Chinese government is asking us to set up the manufacturing facilities in China.
Unlock Leadership Excellence with a Range of CXO Courses
| Offering College | Course | Website |
|---|---|---|
| IIM Lucknow | Chief Executive Officer Programme | Visit |
| Indian School of Business | ISB Chief Digital Officer | Visit |
| IIM Lucknow | Chief Operations Officer Programme | Visit |
If this indeed actually comes about and they liberalise the norms, do you think Indian pharma companies can actually start drawing plans to address the Chinese export opportunity because we have been making a case for better trade relation in the pharma front with China for some time now?
Yes it is very important that China should open up the market because we have been allowing API manufacturing in India without insisting that the manufacturing plant has to be set up. China should also respond by setting up manufacturing facilities in India and they should allow Indian exports to China which will benefit their patients.
Till now, despite a lot of trials, the China opportunity has been very farfetched. Do you think it is set to change in the coming years?
Yes, if they start opening up their market, it will benefit Indian companies as well as China. In fact, Indian companies are very keen to enter the Chinese market which will benefit Chinese patients. In fact, Sun Pharmaceutical bought a company recently; Dr Reddy’s has been there in this market for a period of time and there are multiple manufacturers. Natco is trying to market their products there. Other companies will start examining and evaluating Chinese markets once they open up and Chinese patients will benefit immensely.
You work closely with so many companies and you have of course, been the MD of Abbot. Could you help us understand what is the size of opportunity as far as China goes and what are potential areas where Indian companies can work closely with China?
China is the second largest market. I do not remember the figures right away. Our imports to China are very limited. We export around $5.5 billion to US while exports to China may not be more than $400-500 million. It is too small at the moment. But from the Chinese point of view, it will benefit greatly because for many of the products which they are importing from other parts of the world, the cost will go down if they start importing from India.
ADVERTISEMENT
Can China become one of the biggest markets for us as well?
It can if they open up the market. It is still early days and the steps which have been taken which are too small at the moment. We have to go a long way.
Stocks Recommendations
As regards the business that we do with the US, can regulatory and pricing pressure issues ease out from here for Indian companies?
Very difficult to say but maybe it will not be to an extent which has been happening in the last three years. There is relatively more stability in the market but it is very difficult to say that it is over. As far as Indian companies are concerned, we need to focus more on innovation and complex generics.
ADVERTISEMENT
