China looks to take on US generic drug market

by Kristi Park, June 24th, 2008, 7:00 am

Like the Britney Spears of the business world, the Chinese drugmaking industry seems to be in the news quite a bit, but rarely for anything good. The country’s domestic prescription drug market has had numerous issues with counterfeit products, and the government executed its pharmaceutical regulatory chief for taking bribes last year. This year, tainted batches of the blood thinner heparin caused a number of deaths in the US; that heparin came from China, where the regulatory framework for monitoring the production of active pharmaceutical ingredients is shaky. Problems with FDA oversight of drug imports haven’t helped matters.

The concerns over Chinese drug manufacturing don’t seem to have stopped major international drug firms from investing heavily in the region, and, as the New Jersey Star-Ledger reported on Sunday, the country’s own generic drugmakers are looking to break into the enormous US market for generic drugs, where around two-thirds of prescriptions are filled with generic equivalents.

Though it will be at least three years before Chinese products start appearing in the US in large quantities, the onslaught of Chinese generics seems all but inevitable. In order to protect US consumers, the FDA would do well to use the intervening time to beef up its oversight of Chinese factories and to pressure the Chinese government to get its own act together. But drug users aren’t the only ones who ought to be worried about Chinese generics on the horizon. With their vastly lower labor costs, Chinese generic products would likely cost less even than their Indian counterparts, so the world’s big generic makers — Teva, Sandoz, Barr, Watson, and Mylan, among others — have plenty to keep them up nights too.