Figure 2: The number of final abbreviated new drug application (ANDA) approvals belonging to groups headquartered in India and the number of Indian groups holding final ANDAs, 1998–2007.

Several North American and European generics companies, among them Watson (Corona, CA) and Sandoz, have established a dose-manufacturing presence in India. Sandoz's Indian dose-manufacturing facilities include three sites in Maharashtra: an antituberculosis drug plant in Kolshet, a cephalosporin plant in Turbhe, and an oral solid-dosage plant in Kalwe. In 2005, Watson acquired from Dr. Reddy's (Hyderabad) an oral solid-dose manufacturing facility in Goa. To date, only a few foreign generics companies seem to be eyeing the Indian drug market. Although Mylan (Canonsburg, PA) gained presence in the Indian dose market through the acquisition of Matrix (Secunderabad), we believe the main impetus behind the acquisition was to access to Matrix's API and finished-dose manufacturing capabilities.

There are a number of reasons why generics players have shied away from entering the Indian market with their dose products. Major challenges include the large number of local generic-drug manufacturers with access to inexpensive APIs, intense price competition, and the need for considerable marketing presence.

Major pharmaceutical companies such as Abbott (Abbott Park, IL), AstraZeneca, and Boehringer Ingelheim (Ingelheim, Germany) have been marketing their products in China for several years, however, even the largest companies have not penetrated all the corners of this vast country. Earlier this year, for example, Pfizer announced that it will be increasing the number of Chinese cities that it serves from 110 to more than 650. To reach the smaller cities and rural areas, pharmaceutical companies must expand their distribution networks and hire hundreds or even thousands of sales people.

Several foreign generics companies, among them Stada, Actavis, and Teva, also have been marketing their finished-dose products in the Chinese market for a number of years. For example, Teva inherited a presence in the Chinese generics market through the acquisition of Sicor (Irvine, CA) and Ivax (Miami). Both Sicor and Ivax had established joint ventures with Chinese partners, Tianjin Pharmaceutical Holdings and Kunming Pharmaceutical Factory, respectively. Meanwhile, Sandoz acquired a generic-drug manufacturing facility in the Guangdong Province at the end of 2007. The facility used to belong to Grünenthal and is reportedly already supplying products to major Chinese cities. This is Sandoz's second facility in China. As a result of acquiring Hexal (Holzkirchen, Germany) in 2005, Sandoz inherited Hexal's facility in Tianjin.

In addition to competition from local generics players, accessing distribution channels and reaching different corners of China are only a few of the major challenges facing generics companies interested in the Chinese market. In China, many companies focus only on one province, so partnering with those companies would not necessarily help a foreign company penetrate this fragmented market. Generics companies also must keep in mind that not all drugs have been approved in China, so clinical trials may be required before a particular generic drug can be introduced in the Chinese market.