In 2022, the national medical insurance negotiations will officially come to an end, and the “soul bargaining” will fail when Pfizer fails, and Paxlovid’s medical insurance will be temporarily paid until March 31, 2023.
The CEO of Pfizer refused to budge, “China is the world’s second largest economy, and the new crown drug should not be too cheap.”
The scalpers in the circle of friends “show great kindness”, “do not make money or make money, 48,000 yuan for a box of Paxlovid”. At the same time, India’s new crown generic drugs have quietly flowed into China, with prices ranging from 700 yuan to 1,639 yuan.
It should be noted that although the new revision of the Drug Administration Law, imported unapproved overseas drugs are no longer considered as “fake drugs”, but there is a premise that “a small amount” will still be punished as “fake drugs”.
How strong are Indian generic drugs? The price is competitive, the quality is guaranteed!
Compared with patented drugs, Indian generic drugs are identical in dosage, safety, efficacy, function, quality and indications, but the average price is only 20%-40% of patented drugs, and individual varieties even differ by more than 10 times. No markup.
In 2013, Gilead launched a new drug, Sofosbuvir, which can cure the fatal hepatitis C. The 12-week course of treatment is 84,000 US dollars, and the Indian generic drug only costs 500 US dollars.
In 2017, the original version of Gleevec, a leukemia drug known to the general public because of “I’m Not the God of Medicine”, cost 11,900 yuan for a bottle of 60 tablets. Bottle of 120 tablets.
The world’s largest exporter of generic drugs, supplying 20% of the world’s generic drugs!
According to data from the Indian Pharmaceutical Alliance (IPA), there are about 3,000 local pharmaceutical companies and about 10,500 pharmaceutical factories in India, which can produce hundreds of raw materials and more than 60,000 preparations, and the supply of generic drugs accounts for 20% of the global share.
At present, 90% of companies in India are engaged in the production of generic drugs, and Indian pharmaceutical companies account for 40% of the top 10 global generic drug companies in 2021. Among them, Sun Pharma, as the leading pharmaceutical company in India, will have sales of generic drugs of US$4.64 billion in 2021.
In terms of industry scale, India’s domestic pharmaceutical market will reach US$42 billion in 2021. It is expected that the domestic market will triple in the next ten years, reach US$65 billion by 2024, and grow to US$120-130 billion by 2030.
From the perspective of stimulating the growth of foreign investment, according to the “Economic Survey of India 2021-2022”, foreign direct investment (FDI) in the Indian pharmaceutical industry has increased by 200% during the period 2020-2021.
The output of India’s pharmaceutical industry ranks third in the world, with a total pharmaceutical export of US$24.4 billion and a total import of US$7 billion. Exports are far greater than imports.
Is this still the India where “Ganges water cures all diseases” and “cow dung and urine cures the new crown”?
How to make a world pharmacy?
Looking back at the counterattack of generic drugs in India, it originated from a revolution of “the life of the poor is also life”.
In 1966, the newly appointed “Iron Lady” of India, Indira Gandhi, witnessed the phenomenon that the domestic pharmaceutical market was dominated by multinational companies, the prices of medicines were astonishing, and the poor could not afford medicines. People’s life and death to seek huge profits”, tearing apart the bloody exploitation under the protection of strong patents in Europe and the United States.
In 1970, the Indian government under the leadership of Indira successively introduced the “Patent Law” and “Drug Price Control Rules”. profit.
Driven by these two important laws and regulations, Indian local pharmaceutical companies have been able to imitate the patented drugs of multinational pharmaceutical companies openly, and local pharmaceutical companies have also ushered in rapid development. Pharmaceutical company market share.
Three years later, India implemented the “Foreign Exchange Control Act”, restricting the shareholding of foreign capital in Indian companies to no more than 40%, driving away the multinational pharmaceutical companies that have long dominated the Indian pharmaceutical industry.
India’s local generic drug companies are in a good position, and they have also blazed a new path of “imitation with innovation”. For example, Ranbaxy Laboratory Ltd. (Ranbaxy Laboratory Ltd.), which started with API (API), successfully imitated Eli Lilly’s cephalosporin Mycotoxin was an instant hit.
Eli Lilly offered to purchase all the cephalosporin raw materials produced by Ranbaxy at a price of US$2,000 per kilogram, while the production cost of Ranbaxy was only US$500 per kilogram.
The poor have used cheap generic drugs, generic drug companies have made profits, and India has laid the foundation for the pharmaceutical industry, which can be said to serve multiple purposes.
The second step for Indian generic drugs is to enter the international market and “counterattack” their hometowns in Europe and America. At that time, it happened to be the golden age of generic drugs in Europe and the United States for ten years.
After local pharmaceutical companies became popular, India joined the WTO to connect with the world, relaxed restrictions on foreign investment, encouraged the development of pharmaceutical joint ventures, and revised the “Patent Law”.
But the shrewdness and thick-skinnedness rooted in the Indian national character is naturally not that simple.
The new patent law is only valid for new drugs invented after 1995; India can still forcibly imitate drugs within the patent protection period, only in the country.
The Swiss pharmaceutical giant Novartis became a “pioneer” and launched the first drug patent lawsuit against the famous Gleevec.
The lawsuit has been fought for more than 7 years, and finally Novartis lost the lawsuit. The “indigenous protection” of the Indian pharmaceutical industry is still strong.
In 2007, Nexaver , a new drug from Bayer AG of Germany, which can treat advanced kidney cancer and metastatic liver cancer indications, obtained an Indian patent.
Natco, an Indian pharmaceutical company, failed to apply for generic drug authorization from Bayer, and angrily took to the court to apply for a compulsory license for the drug. This outrageous request was of course agreed by the Indian authorities.
In March 2012, Natco successfully obtained the compulsory license to produce generic drugs before the expiration of Nexaver’s patent, which is only sold in India. The small price is “to compensate Bayer with 6% of the sales of generic drugs every year”.
It’s not too much to say, right?
But the strange thing is that the “generic drug rogue” India did not wait for the heavy hammer from the West. Instead, the two sides cooperated tacitly. Multinational pharmaceutical giants returned to India to build pharmaceutical factories, jointly seize the local market, and at the same time reverse export to European and American markets. “World Pharmacy” The reputation spread far and wide.
According to reports, there are 119 FDA-certified pharmaceutical factories in India, which can export about 900 kinds of FDA-approved drugs and pharmaceutical raw materials to the United States; there are more than 80 pharmaceutical factories certified by the British Drug Administration.
There are many reasons, such as a complete pharmaceutical system, strong technology accumulated over the years, cheap labor, and the accessibility of English as the first language, etc., but the most chilling thing is that India has relaxed restrictions on drug testing.
In 2012, the biggest scandal in the history of the Indian pharmaceutical industry was exposed, and more than 570,000 people became “human mice” for European and American pharmaceutical giants such as AstraZeneca, Pfizer, and Merck. In 7 years, only 17 of 475 test items passed the inspection. 2,644 people died due to experimental drugs, and there were more than 120,000 accidents caused by side effects of new drugs.
Of course, these 570,000 people will only be the poor, and there will be no shortage of children. A 13-year-old girl from rural India, Sarita Kudum, was forced to take some kind of experimental vaccine after testing a vaccine against human papillomavirus. The drug died soon after, and the other 6 girls who tested the drug also died one after another.
The “counterattack” of Indian generic drugs started from the poor, and at the same time at the expense of the poor, and finally explained that “the real profit point is between life and death.”
Where is the gap between China’s generic drugs?
It is a bit of a breakthrough in cognition that China is also a big country of generic drugs.
Since the founding of the People’s Republic of China, most of the new drugs listed in China are generic products. Nearly 5,000 pharmaceutical companies have a total of 189,000 drug approval numbers, and more than 95% of them are generic drugs.
Data show that the market size of my country’s generic drug industry continues to grow. In 2021, the market size has reached 960.6 billion yuan, and in 2022 the market size will reach 980.1 billion yuan.
Unfortunately, China is not a generic drug powerhouse.
First of all, the level of internationalization is low. The drugs produced in China are mainly sold domestically, and it is difficult to go abroad. The varieties that have passed the WHO drug pre-certification project are less than 1/10 of India.
Secondly, Indian generic drugs can achieve similar effects to original research drugs, but domestic generic drugs are far behind.
During the two sessions in 2007, Academician Zhong Nanshan once said: “Although there are tens of thousands of approved drugs in our country, how many drugs can have the same curative effect as the original drug?”
The voice of “the quality of domestic medicines is not good” is rampant, and some people exaggerately say that “the domestic medicines are not eaten by African refugees”.
The reasons for this are partly historical issues. In the 1980s and 1990s, in order to encourage the enthusiasm of domestic enterprises for pharmaceuticals, coupled with the limited level of research and development, the quality standards set by the state were relatively low, and the pharmaceutical industry as a whole was guided by a relatively loose approval system.
This has led to low quality approval documents and poor clinical efficacy of some drugs. For example, a certain antihypertensive drug was complained by patients that it was a counterfeit drug. After taking it, the blood pressure did not drop, but it was tested and passed the test.
Take Viagra, the male drug “Viagra”, as an example. Pfizer’s original drug disintegrates very quickly and takes effect within 30 minutes, while domestic generic drugs take effect slowly.
Professor Zhou Huiliang of the First People’s Hospital Affiliated to Fujian Medical University once confirmed in an interview, “Many of my patients reported that the original Viagra works quickly, while the domestic Viagra works slowly.”
To a large extent, this has nothing to do with the backwardness of my country’s preparation technology. There is a saying in the generic drug industry, “APIs are not medicines, and knowledge of preparations is king.”
Ibuprofen, which was snapped up some time ago, was ridiculed by netizens as “you have to watch your posture when eating ibuprofen”. Domestic companies have obtained more than 500 registration approvals for ibuprofen, slow-release capsules, slow-release tablets, suspensions, granules and other preparations, some reduce fever in 1 hour, and some reduce fever in 4 hours. The difference in effect is related to the technical level of different brands of preparations.
From the perspective of the completeness of the industrial chain, India has developed a relatively complete pharmaceutical industry with its generic drug industry, covering raw materials, pharmaceutical outsourcing, preparation export, medical equipment, medical tourism, etc., while the domestic pharmaceutical industry has poor upstream and downstream facilities. A large amount of equipment is imported, the production process is aging, and the quality control system is not perfect.
In addition, research and development investment is also an old problem. From 2011 to 2017, the R&D expenditure of Indian pharmaceutical companies increased from 5.5% of operating income to 9%. 7.6% and 13.5% of annual operating income.
During the same period, the R&D investment of Chinese pharmaceutical companies in the top ranks was only about RMB 1 billion.
In contrast, it seems that India has completely outperformed China in both generic drugs and the pharmaceutical industry chain, but the situation has changed in recent years.
Are generic drugs a long-term solution?
The generic drug industry in India is hard to earn money!
The first thing to bear the brunt is that after 2015, the European and American generic drug markets gradually shrank, and the business growth of Indian generic drug companies generally entered a bottleneck period, or even stagnated and declined.
Due to the saturation of the generic drug market and fierce price competition, the average net profit level of the top five generic drug giants in India has gradually dropped from 18% in 2010 to 6.8% in 2021.
The pharmaceutical industry that India is proud of depends on China!
At the end of December, India’s Economic Times published an article titled “Why India’s $50 Billion Pharmaceutical Industry Depends on China”.
RIS, the National Institute of Information Development in India, predicts that imports of API drugs to China will reach 80%-100%, and bio-fermented medicines will reach 100%, such as penicillin and erythromycin.
Bhirud, CEO of India’s Akums Life Science Co., Ltd., said that “we are very dependent on importing API drugs from China, and 75% of API drugs are directly or indirectly met by China.”
This article analyzes that the cost of raw materials in China is 15%-20% lower than that in India, energy prices are low, and the government subsidizes API exports by 13%. Therefore, “China has become a leader in API pharmaceutical manufacturing.”
India has already tasted the consequences of over-reliance on other countries. At the beginning of the outbreak in 2020, Hubei Province, the center of drug production, was the most affected. This led to a shortage of raw materials for Indian manufacturers, and the price of APIs soared by 100%.
India’s solution is to allocate a piece of land in Hyderabad in the south and build a “pharmaceutical city” about 14,000 football fields in size, hoping to get rid of its dependence on Chinese raw materials after completion.
Chinese pharmaceutical companies, which were once obsessed with low-end generic drugs, quietly turned around.
In 2015, the government issued a policy to promote the research and development of innovative drugs and improve the quality of generic drugs, and then promoted the consistency evaluation of generic drugs, which marked the end of flooding and began to “squeeze water” for domestic generic drugs. The existing tens of thousands of generic drugs , only 2045 completed the consistency evaluation.
The state’s massive centralized procurement breaks down the high gross profit of generic drugs, making competition more intense. Taking the second round of centralized procurement in 2020 as an example, the average price dropped by 53%, and the total market size of generic drugs shrank by 21.22%.
At the same time, the drug regulatory department launched the review and approval reform to speed up the approval of new and innovative drugs. All kinds of signals are conveyed that only by waving goodbye to the poor imitation in the past, improving the preparation process, making high-quality generic drugs, and developing new drugs will have a bright future.
According to IQVIA data, innovative drugs accounted for about 5% of my country’s drug sales in 2017. However, some insiders predict that by 2023, the proportion of China’s innovative drug sales is expected to reach 30%, and by 2028 it is expected to reach 50%. China’s innovative drug industry may usher in explosive growth.
Pharmaceutical companies with a keen sense of smell have already taken action. Leading pharmaceutical companies such as Hengrui Medicine announced in 2019 that they would stop their general generic drug projects and only produce innovative drugs and high-end generic drugs with core values.
Chinese pharmaceutical companies have also begun to occupy a place in the international arena.
The American “Pharmaceutical Manager” magazine announced the top 50 global pharmaceutical companies in 2022, including 16 in the United States, 7 in Japan, 5 in Germany, 4 in China, and 2 in India.
Among them, Hengrui Medicine has been on the list for the fourth consecutive year, and its ranking has risen by 6 places to 32nd in 2022. This is the best result achieved by a Chinese pharmaceutical company on the global TOP50 list. The ranking of China’s biopharmaceuticals remains unchanged. Both Shanghai Pharmaceuticals and CSPC advanced one place each.
It is worth mentioning that, compared with the investment in R&D expenses in 2021, the R&D expenses of Hengrui Medicine and China Biopharmaceuticals increased by more than 20% year-on-year.
Imitation and innovation, Chinese medicine has finally blazed a trail.
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