Sunil Jain: The Great Wall of India

PERSPECTIVES

Though Indian pharmaceutical firms continue to beat their Chinese counterparts in the global market, according to a recent report by equity analysts SSKI, the Chinese are rapidly consolidating in even the market for generics (China's already the world's largest exporter of Active Pharmaceutical Ingredients) "" the entry of Zhejiang Hisun in the market for Simvastatin API, for instance, reduced prices by nearly half, and further cuts aren't ruled out.

SSKI cites various studies to show the majority of global pharma executives would rather be in China than in India for low cost manufacturing "" it helps that China's overcapacity is currently at around 45 per cent. SSKI argues that while Astra Zeneca is the only MNC that has an R&D set up in India, scores of MNCs like Roche, Novartis and Pfizer have set up R&D centers in China recently. While SSKI talks of the rapid increase in Chinese Drug Master Filings (DMFs) with the US FDA, India's growth in DMFs is even more impressive, suggesting the gap may not be that easy to bridge.