Generic, biosimilar revenues look solid in Asia with many Indian firms eyeing innovation

SINGAPORE--Various recent reports covering the near-term and long-term outlook for the pharmaceutical industry in Asia paint a positive picture with increased revenues coming from the generics and biosimilars industries along with products as specific as human insulin from China.

The outlook for India's industry was the most comprehensive of the public-access parts of reports providing only short summaries. India, a major generics maker, was expected in a Livemint report to expand at a 14.5 percent compounded annual rate through 2020 when it becomes a $55 billion market. Ironically, many local makers will be chasing innovative products, the report said.

Still, India was expected to remain reliant to a large extent on the generics market, reaping the rewards of $170 billion worth of innovative drugs losing patent protection this year, creating a surge in new generics.

Excerpts from another report, by Life Sciences Research, point to China as the world's fastest-growing human insulin market over the next five years, with India, Japan and South Korea offering only potential growth in that area. The report also expects Brazil, Egypt, Qatar, Saudi Arabia and the UAE to become major insulin producers during the same period.

Asia players in the biosimilars market, on the other hand, are left to play catch up to the United States and five major members of the European Union are expected to retain most of the global market expected to reach as much as $51 billion this year. Japan is the only major player on that stage; other Asian and emerging-markets nations--including China, Brazil, India and Russia--are not able to contribute much because of low purchasing power, high cost of drugs and a lack of brand loyalty.

In emerging markets, expansion by India's Biocon, Dr. Reddy's Laboratories and others already in the biosimilars market provide local companies with opportunities through partnerships. That, and competition from companies with footholds in their own emerging-markets, tend to form a barrier to would-be foreign entrants.

The global generics market, on the other hand, was expected to expand from this year's estimated $350 billion, but also to change a lot over the next 15 years as it consolidates. Japan was considered to provide a large potential for joint ventures. Otherwise, emerging-market countries such as China, India and Russia were expected to attract production facilities of the big players due to lower costs.

Overall, the SNS Research report expects the global biosimilars market to grow at a compounded annual rate of 12 percent for the next five years when it becomes a $20 billion market.

Back in India, the Livemint report suggests India has and will remain hampered somewhat by a continued reliance on API imports and a failure to reach export targets, the latter caused to a large extent by delayed approvals in various countries such as the United States and currency depreciations in several potential markets such as Russia. Thus, its anticipated 10 percent increase was expected to end up being little more than half of that.

Cipla and Aurobindo, both reporting increased revenues, appeared to be emerging as the local industry's drivers, Cipla also among three companies planning major investments. The other potential investors include Strides Arcolabs, for acquisition of Shasun Pharmaceutical, and Lupin's partnership with Merck Serono.

Despite the drawbacks, the report said the India pharma industry can expect continued growth while taking advantage of continued outsourcing and investments by global drug makers and a growing Indian economy.

- here's the Livemint story
- read the human insulin report here
- read the generics report here
- here's the biosimilar industry research

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