[Ip-health] Reuters: Chinese drugs seen driving down generic prices

[Sarah Rimmington]

Thanks to pharmalot.com for the tip...
http://www.reuters.com/article/marketsNews/idCNTL1312745520080513?rpc=3D44

Chinese drugs seen driving down generic prices
Tue May 13, 2008
By Ben Hirschler

LONDON, May 13 (Reuters) - A coming wave of Chinese pills is set to push
down the price of generic drugs, as more low-cost finished medicines
from the country win approval in major markets, according to a report on
Tuesday.

Pharmaceutical information group IMS Health Inc (RX.N: Quote, Profile,
Research) said last year's first okay from the U.S. Food and Drug
Administration for a Chinese generic -- a copy of AIDS drug nevirapine
-- was a sign of things to come.

China is already the world's biggest producer of active pharmaceutical
ingredients (APIs), the chemical raw materials needed to manufacture
medicines, but to date it has not been a significant supplier of
finished generic pills.

Now that is about to change.

Zhejiang Huahai Pharmaceutical Co Ltd (600521.SS: Quote, Profile,
Research) won a U.S. green light last July to sell generic nevirapine,
once the patent held by Germany's Boehringer Ingelheim expires in 2012.

At least 10 other Chinese companies are set to follow suit with other
generic products, according to IMS. Some could be available as early as
this year.

The result will be increased competition in a generic drugs industry
that is already struggling with tumbling prices.

"In order to ensure their success in the market, the Chinese
manufacturers are likely to undercut all others on price," IMS said in
its annual Intelligence.360 report.

"Chinese policy will drive generic prices down still further, with
far-reaching consequences for both R&D players and international generic
companies."

The rise of Chinese generic drugmakers is expected to mirror that of
Indian firms like Ranbaxy Laboratories Ltd (RANB.BO: Quote, Profile,
Research), which also started out as an API supplier but moved into
finished generic medicines a decade ago.

IMS believes China will seek to erode India's strong position in
manufacturing by targeting the United States, Europe and key emerging
markets.

One potential obstacle for China's emerging generics industry, however,
may be its reputation for quality.

IMS said recent safety issues involving tainted heparin made with
ingredients from China had put the country "on the back foot".

"India has had less publicity than China for manufacturing inadequacies
... and it is here where the competitive battle may be won or lost," IMS
said.

Contaminated supplies of various brands of the blood thinner heparin
have been linked to 81 U.S. deaths since January 2007.

(editing by Elizabeth Fullerton)

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--
Sarah Rimmington
Attorney
Essential Action, Access to Medicines Project
Washington, DC
Tel: (202) 387-8030
Cell: (202) 422-2687
www.essentialaction.org/access/