Pharmaceutical products from India could gain easier entry into the China market, thanks to two of the many MoUs signed between the two countries yesterday as part of Chinese President Xi Jinping’s visit to India.
One MoU was part of the effort to balance the long standing trade deficit, currently skewed in favour of the dragon nation. Along with pharma, agri products and IT services are the sectors where China has agreed to take specific measures to enhance market access.
Another MoU was a work plan on drug administration and cooperation between the drug regulators of both countries on drug standards, traditional medicine and drug testing. Both sides will exchange delegations to enhance cooperation in these area.
These two MoUs address two of the major pain points: market access and approvals, faced by Indian pharma companies trying to make inroads into the China market. Proper and speedy implementation of both MoUs could have a very positive impact on pharmaceutical companies in India. Currently, only a handful Indian pharma companies, including Dr Reddy’s Labs, Ranbaxy, Sun Pharma and Aurobindo are present in China.
Most trade associations in India have been articulating the need for such measures for quite some time. Reacting to the MoUs Dr PV Appaji, director general, Pharmaceuticals Export Promotion Council said, “This is a huge opportunity for both countries to share quality, affordable generics. If China follows UK MHRA and US FDA guidelines, this will encourage Indian pharma companies to focus on the China market.”
Daara Patel, Secretary General, Indian Drug Manufacturers Association, too notes that this has been a long-standing demand from IDMA and the Association is happy that these MoUs have been signed as formulations are a strength area for India. Looking ahead, he makes the suggestion that translation of the Chinese Pharmacopoeia and making the rules more user-friendly would further encourage Indian pharma companies to export to China.
China’s healthcare budget can be hugely reduced if access to Made-In-India formulations is increased and approval time lines are improved. Industry observers point out that it takes about five to six years for even well known Indian pharma firms to register their products in China. On the other hand, approvals for Chinese APIs are granted in four-six months.
This imbalance in the licences and registration timelines is a major pain factor for Indian pharma companies.
Improving the trade balance
The agreement is a key part of the MoUs signed by India’s Minister of State for Commerce and Industry Nirmala Sitharaman and China’s Commerce Minister Gao Hucheng, The MoUs lay the ground work for a five year Trade and Economic Development Plan, for promoting balanced and sustainable development of economic and trade relations between China and India, on the principle of equality and mutual benefit.
One of the MoUs, the fifth of the 16 signed on the third day of the Chinese premier’s trip, was the agreed Minutes of the Tenth Session of India-China Joint Economic Group on Economic Relations, Trade, Science and Technology (JEG) which was held in Beijing on September 2. Nirmala Sitharaman and Gao Hucheng.
During the JEG, both sides had held detailed discussions on issues to promote broad and deep bilateral trade and economic cooperation between India and China and agreed to undertake measures to achieve sustainable and balanced trade. Specific measures to enhance market access to Indian products such as agricultural, pharmaceutical and export of services will be expedited.
The main objectives of the plan are reduction of bilateral trade imbalance; strengthen investment cooperation to realise $20 billion investment from China in five years, a transparent, and stable and investor friendly business environment, and enhanced cooperation between Chambers of Commerce and financial sectors.
Cooperation between drug regulators
The second MoU which will impact the sector, the 11th, was a work plan on drug administration and cooperation between China Food and Drug Administration of the People’s Republic of China and Ministry of Health and Family Welfare of India. It was signed by Ministry of Health and Family Welfare Secretary Lov Verma and Ambassador of China to India Le Yucheng. Under this MoU, the two sides will carry out cooperation in fields of drug standards, traditional medicine and drug testing, etc. Both sides will exchange delegations to enhance cooperation in this area.
EP News Bureau-Mumbai