Hyderabad-based Natco Pharma, Hetero Labs, Dr Reddy’s arm bag generic drug contracts in China

In a breakthrough for India’s pharmaceutical sector, firms including Hetero, Cipla, Annora, and Natco have won Chinese government bids to supply generic drugs like Dapagliflozin and Olaparib, marking a significant entry into China’s tightly controlled healthcare market

Beijing: Indian pharma firms operating in China have made some headway into the Chinese market winning bids to supply bulk generic drugs, specially the widely prescribed Dapagliflozin which is used to treat diabetes.

Indian firms, including Hyderabad-based Hetero Labs Limited, Natco Pharma, Cipla Ltd and Annora Pharma Private Limited, won the bids conducted by the Chinese health ministry for procurement of pharmaceuticals for its hospitals, according to the India-China Economic and Cultural Council (ICEC).

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Hetero Drugs Ltd and Cipla Ltd were among the seven firms that have won the bid to supply a billion tablets of Dapagliflozin which is used to treat diabetes.

Under the volume-based procurement (VBP) bidding process, the two Indian firms will be allotted a specified number of Chinese provinces to supply the drug.

Annora Pharma Pvt Ltd won the bid to supply Oxcarbazepine Tablets and Natco Pharma secured a bid to supply Olaparib tablets.

Also, Kunshan Rotam Reddy Pharmaceutical Co, a Chinese subsidiary of Hyderabad-based Dr Reddy’s Laboratories, has won bids to supply four products.

The latest bidding round held last month covered 55 drugs across anti-infectives, anti-tumour treatments, allergy treatments, and other fields, with a total of 453 products from 272 companies being pre-selected as winning bids.

Of this, Indian firms managed to secure contracts to supply seven drugs.

According to ICEC, Dapagliflozin currently dominates the small molecule drug sales in the Chinese pharmaceutical market with sales exceeding eight billion RMB (about USD 1.14 billion).

Its sales in public hospitals in 2024 in China amounted to 5.352 billion RMB, (over USD 700 million).

Sources in Indian pharma companies based in China told PTI that the selection of Indian players is an encouraging sign towards breaking into the mega Chinese drug market dominated by multinational and local firms.

The multinational pharma firms that have monopolised Chinese market for decades are not able to win the VBP in view of extremely low pricing.

Under the VBP process bids are allotted to firms quoting lowest rates. But while the prices are low, the high volumes are an attractive proposition, they said and declined to specify how much they actually gain out of the new bidding process.

Prices of generic drugs have touched the lowest levels in the past 10 years, which pharma companies attribute to an attempt by the government to reduce the burden on the reimbursement budget due to sharp increases in elderly population and mass health coverage.

“It is challenging to compete with Chinese companies who have cost leadership being backward integrated into APIs… It is worth noting that China remains the biggest source of APIs (Active Pharmaceutical Ingredients) for Indian pharma companies,” one Indian pharma company official said.

But at the same time, for Indian firms specialising in generic drugs in China, it is important to participate in VBP bidding as it is the only way to have access to a large market.

Currently there are about 10 Indian pharma firms establishing their foothold in China, with some having their own local production units.

The Indian firms have to not only develop and register products in China very fast but also scale up their manufacturing and target cost leadership if they have to remain relevant in the vast Chinese market, said an official of another Indian pharma firm.

For years India has been pressing China to allow its pharma products along with IT, the mainstay of India’s exports, to address the ballooning trade deficit which has touched almost USD 100 billion in China’s favour in about USD 119 billion bilateral trade with little success.