China better than India for low-cost drug manufacturing-Survey

A majority of international pharmaceutical executives rate China a better choice than India for low-cost drug manufacturing though many were keen to do business in India in future, according to a new survey conducted by Bain & Company, a leading global business consulting firm.

"Nearly 90 per cent of pharmaceutical executives consider China a better choice than India for low-cost drug manufacturing," the survey released in New Delhi on Thursday showed. "Furthermore, only 17 per cent of the respondents cite innovation as a key asset of Indian drug makers," the survey highlighted.

The survey which sampled 179 international executives, with headquarters in North America, Europe, Asia and India, concerns that intellectual property protection (56%), parallel trade or grey market imports (52%) and regulatory uncertainty (46%) are the main issues affecting the Indian industry.

"The Indian pharmaceutical industry now stands at the crossroads," said Ashish Singh, managing director of Bain & Company India and head of the consulting firm's Indian Pharma Survey. "If India is looking to be the home for quality generic drugs, it needs to step up its innovation game," he further said.

In spite of the current concerns with India’s pharmaceutical industry, international executives increasingly expect greater collaboration with India in the future.
While only 38% of the respondents now consider doing business in India to be "extremely important", that number climbs to 62% when survey participants were asked to project the marketplace five years from now.

Likewise, 35% characterized India as an "attractivee" market in 2006 (as a domestic market for drug purchase and consumption), while 58% anticipated the market to look up by 2011.

"If Indian pharma is effective in shoring up its operating and cost structure, promoting innovation and gaining more regulatory credibility, the challenges both from mature markets and from developing countries like China should substantially lessen," Ashish Singh said.

The survey rates pharmaceutical giants like Ranbaxy Laboratories, Dr Reddy's Laboratories, and Cipla as best those positioned for leadership in the Indian market in five years.