The Hindu Business Line : `China scores over India in low-cost drug manufacture'

Nearly 90 per cent of pharmaceutical executives consider China a better choice than India for low-cost drug manufacturing, according to a survey by Bain & Company, a global business consulting firm. Furthermore, only 17 per cent of the survey's respondents cite innovation as a key asset of Indian drug makers.

Bain's sampling of 179 international executives with headquarters in North America, Europe, Asia and India also expressed concern over intellectual property protection (56 per cent), parallel trade or grey market imports (52 per cent) and regulatory uncertainty (46 per cent) in India.

"The Indian pharmaceutical industry now stands at the crossroads," said Mr Ashish Singh, Managing Director, Bain & Company India, and leader of the consulting firm's Indian Pharma Survey.

Innovation game

"If India is looking to be the home for quality generic drugs, it needs to step up its innovation game."

Despite current concerns with India's pharmaceutical industry, international executives increasingly expect greater collaboration here in the future.

While only 38 per cent of the respondents now consider doing business in India to be "extremely important", that number jumps to 62 per cent when survey participants were asked to project the marketplace five years from now.

Costs involved

Half the respondents agree that India has better development than China, while only 14 per cent feel it has lower manufacturing costs. While four out of 10 respondents feel Indian drug companies are complementary to their business, only two of 10 feel the same about Chinese companies.

India, it was felt, could best increase foreign investment at the expense of China with better protection for intellectual property rights and a better trained workforce.

"If Indian pharma (industry) 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," Mr Singh added.

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