beyondbrics

By Girija Shivakumar in New Delhi

India is running scared of China’s fast-growing biopharma sector. China’s progress in this key sector of global pharmaceuticals has been so rapid that Indian companies fear they might be losing their traditional advantage in the industry.

China has been quick to capitalise on the growing demand for biosimilars – follow-on versions of original biopharmaceutical drugs used to treat cancers and genetic disorders. Of the $71bn global biopharam market, India’s has just $2bn and China a towering $10bn.

Almost 20 internationally-recognized Indian companies produce biosimilars. These include Dr, Reddy’s Laboratories, Ranbaxy and Reliance life Sciences. Many Indian companies have been supported by skills brought back to India from the US.

But China’s state-driven support for biopharma is causing Indian companies alarm. The Chinese government has built more than 100 biotechnology parks, including Shanghai Zhangjian High Tech Park, that have attracted multinational companies. Many local Chinese biopharma companies, meanwhile, are collaborating with International companies leading to speedy enterprise development and focus on R&D. China is also proving successful at attracting foreign venture capital.

A report from PwC says China is entering a “golden age” of the biopharmaceutical sector – facilitated by substantial investment, patent protection and strong regulation by the central Government.

India’s other emerging global competitors include Israel, Singapore, Taiwan and South Korea. But its companies feel handicapped by lack of state support. To capture 10 per cent of the global biopharma market India needs to invest at least $1bn over the next five years, says PwC.

But as important is the regulatory framework, legal protection, and infrastructure to support this young industry.

PwC’s research indicates that China is constantly innovating to increase its global market share – for every dollar India invests in innovation, China invests as much as ten times that amount.

PwC says India needs to act fast and implement faster to be a significant player in the global biopharmaceutical Industry. If not, there are chances of losing out to China in an area where India traditionally was once considered to have a promising competitive edge.