New Chinese policy is creating opportunities for Indian API suppliers and drug makers.

The Chinese government has been making various moves to reduce drug costs. It has introduced policies encouraging the use of generics, even reducing their prices. It is also requiring that generic suppliers prove their products have the same quality as the corresponding branded drugs. Another avenue in this effort involves opening up the Chinese market to competition from foreign suppliers. Indian API suppliers have taken notice and are moving to take advantage of the opportunities the new policy is creating.

Cipla is forming a joint venture with Chinese company Jiangsu Acebright Pharmaceutical to manufacture respiratory products for the Chinese market. The Indian firm will hold an 80% stake of the $30 million combined investment. This move is in direct opposition to the withdrawal of Cipla implemented in 2012 from Desano Group (now called Acebright Group), the parent firm of Acebright Pharma.

Sun Pharma also recently signed two licensing deals with China Medical System, giving the Chinese company local rights to its generic version of Allergan’s dry eye therapy Restasis and Ilumya, a psoriasis drug that was approved in the United States in 2018. In late 2018, a subsidiary of Aurobindo Pharma formed a joint venture with Shangdong Luoxin Pharmaceutical Group to manufacture nebulizer inhalers and other products, and Dr. Reddy’s Laboratories has plans to build a production plant in China and launch approximately 70 products in the Chinese market in the coming years.

The march into China comes as these large generics makers continue to face pricing pressure in the United States. It also comes as China consolidates its generic drug market by requiring makers of already-approved generics to conduct another evaluation to prove quality consistency with originator products if they want to stay on the market. The country has also rolled out policies encouraging the use of generics, while at the same time cutting back their prices.