Last year's US approval of a Chinese-made generic version of Boehringer Ingelheim’s HIV/AIDS drug Viramune (nevirapine) is set to open the floodgates to more generic drugs arriving onto western markets from China, and their manufacturers will aim to ensure their success by undercutting the prices of all their competitors, according to new forecasts from IMS.

While Zhejiang Huahai Pharmaceutical Co cannot export its US Food and Drug Administration (FDA)-approved version of Viramune to the USA until the innovator’s patent expires in 2012, at least 10 more Chinese generics firms are readying their own versions of patented drugs, and some of these could arrive on the market as soon as this year, says IMS, in its annual Intelligence 360 report, published this week (May 13). The firms will target the USA, Europe and major emerging markets, and their undercutting policies will drive generic prices down still further, with far-reaching consequences for both the research-based industry and international generics makers, the report adds.

China is already the world’s largest supplier of active pharmaceutical ingredients (API), and it charges 10%-15% less for these ingredients than its major rival, India, according to figures from Frost & Sullivan.
However, if China is to topple India as the world’s leading source of generic medicines, it will need to deal with the recent scandals over contaminated products, such as the tainted supplies of the blood-thinner heparin originating in the country which have been linked to more than 80 deaths in the USA since January 2007.

India’s generics industry, which is estimated to be 10 times the size of China’s, has had less exposure to bad publicity over quality and safety issues than China and, according to IMS, “it is here where the competitive battle may be won or lost.”