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my country and India are both big producers of generic drugs. After years of development, my country's preparation production capacity ranks first in the world, the consumption structure is mainly domestic, and the international trade market share is very small. According to the data of the China Chamber of Commerce for Import and Export of Medicines and Health Products (hereinafter referred to as the Medical Insurance Chamber of Commerce), the total export value of preparations in my country in 2020 is 4.93 billion US dollars, of which the export value of preparations to the United States is 680 million US dollars. India is the world's largest exporter of generic drugs, with obvious advantages in internationalization. According to data from the Indian Pharmaceutical Export Promotion Association, in the 2020-2021 fiscal year, India's total export of generic drugs was US$18.85 billion, of which generic drugs exported to the United States accounted for about 30% of its total exports.

The United States is the world's largest generic drug market, and the largest market for Chinese and Indian pharmaceutical exports is the United States. As far as the US market is concerned, the internationalization of generic drugs in China and India is different in terms of industrial development logic, first generic drugs and patent challenges.

Actively expand the US market

In the 1970s, the Indian government successively introduced a series of policies such as "cancelling pharmaceutical and chemical patents", "restricting the shares of foreign-funded enterprises", and "increasing tariffs to restrict imports", restricting the development of multinational pharmaceutical companies in India and promoting the rapid development of domestic pharmaceutical companies. develop. In particular, India's strong imitation policy has directly promoted the take-off of the country's generic drug industry. With the surge in the number of generic drug companies, intensified competition in the Indian pharmaceutical market, and strict government restrictions on drug prices, India in the 1980s became one of the countries with the lowest drug prices in the world. In order to survive and develop, some Indian companies are actively planning to go overseas. It coincides with the introduction of the "Drug Price Competition and Patent Term Restoration Act" (also known as the Hatch-Waxman Act) in the United States in 1984, which opened the golden age of the development of generic drugs in the United States. In the same year, the Indian company Cipla began to explore the US market. Indian pharmaceutical companies attach great importance to resource integration. As more and more Indian pharmaceutical companies go overseas to the United States and catch up with the policy dividends of the great development of the US generic drug market, the development momentum of Indian generic drugs is strong.

After the reform and opening up, my country's pharmaceutical industry has developed rapidly. In the early days, the strategy of "market for technology" enabled international trade pharmaceutical companies to develop rapidly in China. With the rapid economic growth and the gradual expansion of the scale of medical and health expenditures, my country's generic drug industry has entered a stage of rapid and savage growth with low-level repetition. , The quality level of domestic generic drugs is uneven, but companies can rely on flexible sales methods to dig gold in the domestic market. At that time, domestic pharmaceutical companies did not have the driving force to "go out". From 2000 to 2015, many leading pharmaceutical companies gradually tried to seek the development of the international trade market. Since July 2015, the State Drug Administration has issued a series of policies and measures to encourage the research and development of new drugs, and strengthened the connection between my country's drug regulatory regulations and the international market, creating more possibilities for domestic pharmaceutical companies to expand the U.S. market. Compared with India, Chinese pharmaceutical companies have long relied on the dividends of the domestic market and entered the US market late, and more opportunities need to be further explored in the international trade market.

Accelerate the approval of preparations

Indian pharmaceutical companies are familiar with U.S. regulatory regulations and market rules, and are especially good at document production and document management. To a certain extent, they even surpass local U.S. pharmaceutical companies. Therefore, the number of U.S. generic drugs submitted for approval is far ahead of my country’s. From 2010 to 2019, the number of approved generic drug registration applications (ANDAs) by Indian pharmaceutical companies accounted for more than 35% of the total number of approvals by the US Food and Drug Administration (FDA). The total number of ANDAs approved by Sun Pharma alone has exceeded 400. Indian pharmaceutical companies have formed a rich product pipeline in the United States, and the sales of generic drugs in the US market has become the main source of income for Indian pharmaceutical companies.

Chinese enterprises started relatively late. In 2007, Huahai Pharmaceutical's nevirapine became the first Chinese preparation product certified by the FDA, and Chinese pharmaceutical companies officially opened the way for preparations to expand into the US market. According to the data of the Medical Insurance Chamber of Commerce, from 2006 to 2010, only 6 Chinese pharmaceutical companies successfully registered with the ANDA in the United States; from 2010 to 2014, the annual average number of ANDAs approved in the United States for Chinese preparations was only about 20. This number has grown rapidly since 2015. In 2020, Chinese pharmaceutical companies received more than 80 ANDA approvals in the United States. Although the number has increased rapidly, the approved dosage forms are relatively simple, mainly oral preparations and injections. At present, the Chinese pharmaceutical company with the largest number of ANDAs approved in the United States is Huahai Pharmaceutical. As of April 6, 2022, the company has obtained a total of 74 ANDA documents.

At present, the FDA has greatly increased the filing fee for generic drugs. At the same time, as competition in the U.S. generic drug market intensifies and generic drug prices drop, Indian companies are also transforming in the direction of fewer and more refined generic drugs declared in the U.S. Chinese enterprises must learn to increase the varieties of generic drugs approved in the United States at the lowest cost.

The first generic drug becomes the main direction

As the general generic drug market in the United States has become a red sea, many international trading companies have set their sights on the first generic drug. The FDA generally gives priority review to the first generic drug. The price of the first generic drug can reach about 70% of the price of the original drug, and the first generic drug that has successfully challenged the patent will also have a market exclusivity period of 180 days. In 2001, the 40mg Prozac tablet developed by Dr. Reddy of the Indian pharmaceutical company became the first generic drug harvested by an Indian company in the United States. With rich experience in drug imitation and familiarity with U.S. regulations, Indian pharmaceutical companies continue to challenge new drug patents and compete for the first imitation in the U.S., with repeated success. Taking Dr. Ruidi as an example, as of the end of March 2018, 63 of its 107 ANDA projects under review had submitted patent challenges, and 30 were the first to submit.

In 2014, Prasugrel from Sunshine Pharmaceuticals became the first generic drug approved in the United States in my country. In 2017, Huahai Pharmaceutical's Paroxetine Capsules became the first generic drug in China to successfully challenge the PIV patent in the United States. According to the statistics of the Medical Insurance Chamber of Commerce, in 2019, a total of 46 companies approved 95 first generic drugs in the United States. Among them, Indian pharmaceutical companies have obtained more than 30 first imitations, accounting for nearly one-third of the total; only one Chinese pharmaceutical enterprise, Xuantai Pharmaceutical, has obtained the first imitation of posaconazole enteric-coated tablets.

"The world's martial arts, only fast is not broken." Only by fighting for the first imitation can it get rich returns in the US market. With the continuous advancement of the consistency evaluation of generic drugs, the strength of Chinese enterprises to develop generic drugs in accordance with the unified technical standards and the global evaluation system of the International Association for the Harmonization of Drug Registration Technology for Human Use is constantly increasing. It is believed that the first generic drugs with high barriers to R&D and production will also become the main development direction of Chinese pharmaceutical companies in the US market in the future.

Develop international mergers and acquisitions and capital operations

The reason why Indian generic drug companies can develop into international giants is inseparable from their active mergers and acquisitions. Through continuous mergers and acquisitions, Indian pharmaceutical companies have increased the number of ANDAs approved, rapidly expanded the scale of their generic drugs, formed a rich product pipeline, and gradually established strong market barriers. Taking Sun Pharma as an example, since it first acquired the API production base of Knoll Pharma, a multinational pharmaceutical company, in 1996, Sun Pharma has acquired 16 companies, including 5 mergers and acquisitions involving the US market. The largest generic drug company in the United States.

The overseas mergers and acquisitions of Chinese generic drug companies are relatively conservative. Since 2016, Chinese pharmaceutical companies have begun to implement overseas mergers and acquisitions on a large scale. In 2016, Huahai Pharmaceutical acquired the Charlotte plant in the United States; in the same year, Renfu Pharmaceutical acquired Epic Pharma for US$529 million, and relied on this acquisition to obtain a number of ANDA approvals. In 2017, Fosun Pharma successfully acquired Gland Pharma, an Indian pharmaceutical company, at a cost of US$1.091 billion. It is reported that as of 2020, Gland Pharma controlled by Fosun Pharma and its partners have more than 260 ANDAs in the United States.

International M&A is an accelerator for the international development of a company, and it is also an important factor for Indian pharmaceutical companies to widen the gap with their Chinese counterparts in the US market.

Create a localized industrial chain ecology

Generic drugs must eventually be listed and profitable in the US market, involving research and development, international registration, certification, market access, and marketing systems. Indian pharmaceutical companies are familiar with FDA rules, have fast research and development speed, strong reporting capabilities, many clinical institutions that meet FDA requirements, and relatively low labor costs and hospital bed costs. Indian companies have been operating in the U.S. market for many years and have a good understanding of the U.S. generic drug sales rules. Some mainstream distributors also have Indian-born managers. Indian companies have formed a complete industrial ecosystem of R&D, production and sales in the United States, which has paved the way for Indian companies' products from development to commercialization. Taking Dr. Reddy as an example, it has been rooted in the United States for many years, forming a complete industrial chain and a relatively complete sales system, and its products can be quickly put on the market after being approved in the United States.

Internationalization does not happen overnight. From the approval of ANDA to the realization of commercial profits, Chinese pharmaceutical companies still have a long way to go. How to choose a sales model for an approved product, and how to quickly resolve various regulatory issues after listing, these are all difficult problems that need to be solved step by step for Chinese pharmaceutical companies that have not yet formed a sales system in the U.S. market.