China’s Expansion In Pharma Industry Spells Trouble For India And Developing Nations

Mahima Negi
·6-min read

The Indian pharmaceutical industry is the third-largest in the world by volume and the 14th largest by value. It is known for selling medicines at reasonable and feasible prices.

Indian pharmaceuticals have relied on Chinese API imports for approximately 70 percent of their total drug requirements. Cipla, Lupin, Dr. Reddy’s Laboratories, Aurobindo Pharma, and Sun Pharmaceutical Industries are some names of India’s top pharmaceutical firms.

Recently, the government took initiative to create an expert committee that identifies the constrictions in the pharmaceutical industry in order to design an action plan to attract investments.

Expansion Of Chinese Pharma

China has been increasingly exporting active drug ingredients, especially to India. This helps in the reduction of production costs including research and development, and in turn, Indian companies supply medicines at reasonable prices elsewhere in the world.

But now, China’s pharmaceutical industry is expanding into drug formulations. According to data in a report by Scroll.in, China’s global share of formulations exports was 0.4% in 2009 and it grew to 1.2% in 2018, while the Indian industry thrived during the same time as exports increased from 1.5% to 3.6%.

China now exports 36% to the EU and North America, where regulations are the most severe, compared to 19% in 2009. And now even the “Made in China 2025” policy has identified pharmaceuticals as one of its strategic industries.

China’s pharma expansion can be attributed to the improvement of treatment concepts, the optimization of medical measures, the acceleration of new drug access, the improvement of medical service quality, and the dynamic adjustment of medical insurance. These provisions are making the world less uncertain about their drug quality.

Chinese pharma has also laid importance on using AI and genetics for developing new drugs, this will help their firms in enabling them to recognize a thousand molecules that can treat a disease with fewer resources.

Also Read: Twitter India Tags J&K As China’s Territory; Xiaomi Shows Arunachal Pradesh As Not In India

How Is It Trouble For India?

Indian drugs have always been a popular choice internationally but now it seems that the Indian pharmaceutical industry is in trouble.

One of the reasons is China’s pharma growth and active interest in creating medicines instead of heavily exporting ingredients for it to other countries.

The cost of production for India will also increase if it moves away from the ingredients provided by China.

Another difficulty the domestic pharma industry is facing is caused by developed nations. Former President of the US, Donald Trump, gave an executive order for stopping the drug imports, both as active ingredients and formulations. France and Germany also seem to be following the US’s steps.

If the US starts applying this order scrupulously, it will affect Indian pharmaceuticals on a large scale as more than half of India’s pharma earning is from exports and the US pays a major cut of these sales. The US market is critical for Indian companies as they are able to earn a profit from there.

This unmistakably spells bad news for the Indian economy.

Not only that but also the developing countries might have difficulty in procuring the medicines they need, which will also lead to a hindrance to the UN Sustainable Development Goals.

The COVID Impact On Indian Pharma

COVID-19 did highlight India’s importance to developing countries regarding access to medicines.

Numerous Indian institutes like The Serum Institute of India, which is also the world’s largest vaccine producer, are working closely with the World Health Organization for the development of vaccines and immunisation by working to produce and supply 100 million doses of a COVID-19 vaccine at a maximum cost of $3 per dose.

Out of every nation, this is the lowest estimated price for the COVID-19 vaccine. German biotech firm BioNTech’s deal with the US involves a price of $19.50 per dose, while the Moderna/US deal is set at between $32 and $37 per dose.

Serum Institute of India separately has agreement and partnership with other manufacturers in the UK and US for production and distribution of a billion doses for India and other developing countries.

Serum Institute of India is also partnering with US firm Novavax to develop and distribute the NVX-CoV2373 vaccine in collaboration with Coalition for Epidemic Preparedness Innovations and COVAX.

Besides that, other COVID-19 vaccines are being worked upon by Indian pharma firms like Covaxin, which is being developed jointly by Bharat Biotech and the Indian Council of Medical Research.

China is reportedly using its own vaccine projects to gain friendships with countries that stand to benefit in the process, and now China is leading the global race for a COVID-19 vaccine. It has four candidates in the last phase of clinical trials, more than any other country.

“The ability to develop and deliver vaccines to poorer countries would also be a powerful signal of China’s rise as a scientific leader in a new post-pandemic global order.”

-Sui Lee Wee for The Economic Times

If China succeeds in entering the markets successfully, the Indian pharma industry will suffer a major loss. In extension, the developing countries will also not have other alternatives and due to the allegations on China for using vaccines as a mechanism for political and economical benefits researchers are worried.

“If any person in the world gets deprived of their right to a COVID-19 vaccine because of patent rights and profitability, this would be the biggest injustice in this century,” said Md. Sayedur Rahman, a professor of pharmacology at Bangabandhu Sheikh Mujib Medical University in Dhaka.

India, which enjoys an important position in the pharmaceutical industry, has helped many developing nations like South Africa by giving access to reliable medicines for a minimum price and provided cheap drugs in developed nations.

Now this advantage is in threat due to the foreign policies of huge nations and the recent interest of China in growing and improving their pharma industry. Unlike China, India has not used its position to exploit or derive profit.

If India’s pharma industry fails, not only India but other developing nations will only have to rely on the rich and developed nations. The Indian panel for the pharmaceutical industry has to come up with solutions to their lowering reach in the international market.

Image Credits: Google Images

Sources: Scroll.in, The Economic Times, Times Now

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This post is tagged under: India, China, pharma industry, pharmaceutical, drugs, medicine, developed nations, USA, France, developing nations, South Africa, government, policies, international relations, exports, imports, economy, research, science, institute, COVID-19, vaccine

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