Indian drugmakers expand to China through joint ventures: report

Tight competition in the US is driving Indian pharmaceuticals east.

Major Indian pharmaceutical companies are scouting for partners in China driven by increasing risks in the US healthcare market, a report by the Bank of America Merril Lynch (BoA-ML) revealed.

Cipla announced in July that it has entered into a joint venture with Jiangsu Acebright and will set up a manufacturing plant for respiratory products in China. A combined total investment of US$30m will be injected in the joint venture, with an 80:20 stake division between Cipla and Acebright, respectively.

Meanwhile, Aurobindo Pharma is building a new plant in China; whilst Sun Pharmaceuticals has entered into a 15-year licensing agreement with a subsidiary of China Medical System Holdings to develop and commercialise dermatology products that include a drug to treat psoriasis, effective from the date of commercialisation.

According to the BoA-ML report, Indian drugmakers “are seeking partners that can make tangible business contributions, safeguard IP, ensure operational control and manage talent.”

The past few years saw several reforms in China’s healthcare sector, which include improved reimbursement plans for generic drugs and faster processing of regulatory approvals.

Meanwhile, competition tightened in the US, the world’s biggest pharmaceutical market, as new players have emerged in the American healthcare sector attracted by price cuts and faster approvals for genetics.