Chapter 13 The dragon-elephant battle in the pharmaceutical world

In March 2005, after the 2004 economic data of China and India were both released, the European and American economic circles immediately aroused boos. In 2004, China had a mythical growth rate of 9.5%, while India suddenly rushed to a peak of 8.2%, ranking second.China and India, the two huge ancient civilizations, are becoming the "twin engines" of the Asian economy after the "Four Tigers". A large number of foreign investment banks represented by Morgan Stanley have been keeping a close eye on India's development.When it was reported that India's GDP growth rate was catching up with China's, and when people all over the world were busy comparing the advantages and disadvantages of the Chinese and Indian economic development models, American newspapers declared that China and India were engaged in a "dragon-elephant battle."

"Dragon enters the market, but watch out for elephants," the American "Christian Science Monitor" described the fast-growing economies of China and India. Martin Wolf, the chief economic commentator of the British "Financial Times", believes: "The economic rise of China and India, the two major Asian countries, is the most important event of our time." If "Made in China" is synonymous with the Chinese model, then "Indian service" is synonymous with the Indian model, which one is better?Today, when people are still talking about the comparison of the advantages and disadvantages of the Chinese and Indian models, and people are still amazed by the international rise of the Indian software industry, the Indian pharmaceutical industry has also attracted the attention of the world.

The sudden emergence and rapid development of Indian pharmaceuticals have brought a strong impact on the Chinese pharmaceutical industry.Many people in the industry even exclaimed: India's pharmaceutical industry will become China's strongest competitor! We know that the development of any industry is closely related to the overall economic development of the country.To compare the situation of the pharmaceutical industry in China and India, we have to compare the social and economic foundations of China and India first. China and India have very similar national conditions. For example, they are located in the same continent of Asia; both have a total population of more than 1 billion; they are the two largest developing countries in the world; High-quality talents with management skills and technical expertise, etc.The similarities are like a "double-edged sword". On the one hand, it has laid a solid foundation for the development of the pharmaceutical industries of the two countries. On the other hand, due to the strong convergence of the pharmaceutical industries of the two countries, the competition has become more intense.

At present, as far as the pharmaceutical industries of China and India are concerned, their manufacturing capabilities have entered the ranks of the world's major countries, especially in the production of bulk antibiotics. The two countries can basically control the international market.However, the drug research and development capabilities of the two countries are relatively weak, and they are both major producers of generic drugs and major suppliers of pharmaceutical raw materials in the world.Specifically, a comparison can be made from the following five aspects: 1. Enterprise structure: same while reserving differences

Both Chinese and Indian pharmaceutical companies present a corporate structure of "small, numerous, and scattered".According to statistics, there are more than 20,000 registered companies in India's pharmaceutical industry, and more than 90% are small workshops; my country currently has more than 6,000 pharmaceutical companies, and the proportion of small and medium-sized pharmaceutical companies is 86.8%, which is basically the same level. However, in addition to those small workshops, India also has large pharmaceutical companies with international influence such as Ranbaxy, Dr. Reddy's, Cipla, and Sun Pharmaceutical.These companies are no longer satisfied with the Indian domestic market and are shifting their focus to the US market.Although some Chinese pharmaceutical companies, such as North China Pharmaceuticals and Sanjiu Group, are larger in scale (measured by sales revenue) than Indian companies, their international influence is far less than that of large Indian pharmaceutical companies.Although my country also has internationally renowned pharmaceutical companies like Hisun, there is still a long way to go compared with large pharmaceutical companies in India.

2. Industrial upgrading: India takes the lead At present, all large pharmaceutical companies in India have completed the transformation from raw material drug (characteristic raw material drug) companies to generic drug companies. Compared with China, India has corresponding advantages in preparation research and development.Once a patent expires, it can be successfully copied in India within 9 months, and generic generic drugs can be marketed in 3 months after FDA approval.China and India imitate the same species at the same time, and India usually goes on the market 1-2 years earlier than China.

3. Internationalization level: India is clearly superior The medicines produced in China and India can be sold to more than 100 countries in the world, and the export value is basically similar.However, India's export of pharmaceutical preparations accounts for more than 15% of the total export value; while China mainly exports raw materials with low added value, and the export of western pharmaceutical preparations has been hovering around US$100 million, less than 4% of the total. In terms of international capital operation, India is also faster than China. In 1996, India's Sun Pharmaceuticals acquired Caraco Pharmaceuticals in Detroit and entered the US market; Ranbaxy acquired Bayer Pasics, a non-patent drug subsidiary of Bayer, and entered the German market. The company has manufacturing plants in six overseas countries.At present, India has established 4 joint ventures in China: Lupine Co., Ltd. (located in Guangzhou), Ranbaxy Guangzhou China Co., Ltd., Kunshan Rotam Pharmaceutical Co., Ltd. (located in Jiangsu), Aurobindo Tongling Datong Pharmaceutical Co., Ltd. (located in Shanxi).

In contrast, although China has established a few joint venture pharmaceutical companies in developing countries such as Africa, it rarely acquires or merges pharmaceutical companies in developed countries in the capital market, and rarely invests directly in Western countries, and has not even established pharmaceutical production and management in India. enterprise. 4. Patent system: the same starting line In order to cultivate the national pharmaceutical industry, the Indian government has implemented a series of supporting policies over the years. In 1970, the "Patent Law" promulgated by India confirmed the process patent (granting a patent to a procedure used to manufacture synthetic drugs), but did not confirm the product patent, that is, no patent was granted for food, medicine and other substances, only for The manufacturing method is patented.This has encouraged Indian pharmaceutical companies to replace imports with a large number of generic drugs.

China enacted the first "Patent Law" in 1985. For the same reason, China's "Patent Law" only protects the production process of drugs, and does not provide patent protection for the drugs themselves.Therefore, China's pharmaceutical industry has developed by imitation in the absence of scientific research investment, which basically meets the clinical drug needs of the people. After India joined the WTO in 1994, it realized that the patent law must be adjusted in accordance with TRIPS. Since the parliament was adjourned at that time, the President promulgated the "Patents (Amendment) Regulations 1994" to temporarily adapt to the requirements of TRIPS. In March 1995, India's temporary administrative regulations expired and became invalid, and the permanent regulations were not established because the parliament was dissolved, thus causing conflicts between India and developed countries.Under the watchful eyes of the World Trade Organization, India finally made adjustments.

China adjusted its drug intellectual property policy in 1993, implementing conditional administrative protection for drugs, and revised the "Patent Law" in 1992 and 2000. At present, the pharmaceutical intellectual property policies of the two countries have basically been in line with international standards. 5. R&D investment: India is larger than China The implementation of pharmaceutical intellectual property rights has promoted the research and development of the pharmaceutical industries of the two countries.At present, the R&D expenditure of the Indian pharmaceutical industry has increased to about 2% of its sales revenue, and there has been some improvement in the research of patented drugs.The research and development investment of large pharmaceutical companies has reached about 10%.Ruan's company (Dr.Reddy's) invested as much as 14% of sales revenue in 2004.

However, the average R&D investment of Chinese pharmaceutical companies is less than 1%, and the R&D investment of large pharmaceutical companies generally accounts for 1-3% of sales revenue. Hisun Pharmaceutical Co., Ltd., which has the highest R&D investment, only has 8%. It is not difficult to see that the Chinese and Indian pharmaceutical industries are competing one by one: Chinese and Indian pharmaceutical companies are kicking off the prelude to the "dragon-elephant battle in the pharmaceutical industry".Since Hisun's development process is basically consistent with the Indian model, as a representative of Chinese pharmaceutical companies, Hisun plays a pivotal role in this war between Chinese and Indian pharmaceutical companies. The rapid rise of India's pharmaceutical industry has caused an uproar in China's pharmaceutical industry.Various investigation groups set off to India one after another to find out the roots. At the same time when the media from all walks of life were discussing the "Dragon-Elephant Controversy", on May 15, Bai Hua, the chairman of Hisun Pharmaceutical, returned from an inspection tour in India. After 12 days of personal experience and 12 days of immersion, after Bai Hua returned to Taizhou, he held a strategic meeting on Hisun's future development non-stop.For some specific words, we may not be able to get real information or recordings, but there is no doubt that: Hisun’s trip to India made Hisun people understand that we are behind India by at least ten years. Ten years, that's a long time.Ten years, people can't help but think of the wasted years of the Cultural Revolution. China's development has stagnated for 20-30 years, and China's economy has lagged far behind the "Asian Tigers".But nowadays, people's pace of life is constantly accelerating, what kind of efforts do we need to catch up with and surpass after ten years of lagging behind? In fact, it is difficult for us to estimate when Chinese pharmaceutical companies represented by Hisun will catch up with India in the future, but we have such a goal: "If you don't want to be a downstream company in India", you need Chinese pharmaceutical companies to step up their international efforts. pace of change. In 2003, Hisun Pharmaceutical’s sales of statins grew like a volcanic eruption, which not only brought considerable profits to the company, but also brought a large amount of foreign exchange to China, and also attracted people from all walks of life to pay attention to Hisun. On April 18, 2004, a high-level seminar on "China's pharmaceutical industry development and the experience of Zhejiang Hisun Group" sponsored by Peking University and relevant departments of "China Science and Technology Industry" was held in the Zhejiang Hall of the Great Hall of the People. Titles such as "Hisun Model" and "Hisun Phenomenon" have also been added to Hisun.As an export-oriented Chinese pharmaceutical company, Hisun has become a leader in China's pharmaceutical industry and a model for all Chinese pharmaceutical companies to learn from.Shandong Xinhua, an old large pharmaceutical company that was known as the four major pharmaceutical families together with Huabei Pharmaceutical Factory, Taiyuan Pharmaceutical Factory, and Northeast Pharmaceutical Factory in the early days of liberation, also proposed: We will follow what Hisun does. When it comes to Hisun, it is impossible not to mention the "Fish Theory" created by Bai Hua, the chairman of Hisun Pharmaceutical Co., Ltd. - the four stages of technological innovation. One is "spending money to buy fish", mainly relying on the introduction of achievements of scientific research departments for industrialization. The second is "borrowing ponds to raise fish", providing scientific research funding support for promising research projects in scientific research institutes. The third is "release water to raise fish", jointly select topics with colleges and universities and scientific research departments, jointly tackle key problems, innovate products, and realize industrialization. The fourth is "building ponds and raising fish", relying on the company's own scientific research strength to select topics for research and development, from small tests to pilot tests to large-scale production. It is this idea of ​​technological innovation and internationalization strategy that guides Haizheng to grow continuously and rapidly in the past 15 years.Many domestic experts and scholars have interpreted the "Hisun model" as "advanced investment in research and development, one step ahead of the drug administration registration, willingness to invest in technological transformation and integration of resources in line with international standards".In fact, "advanced investment in research and development and willingness to invest in technological transformation" is the display of Hisun's scientific and technological innovation ideas, and "one step ahead of the drug administration registration and international resource integration" are two of Hisun's internationalization strategies. steps.Among the four supporting factors, drug administration registration is the secret weapon for Hisun to go global ahead of Chinese pharmaceutical companies. Hisun’s development experience has continuously proved that to enter a certain country, pharmaceutical products generally have to cross “two thresholds”, or break “two barriers”: one is the national threshold, also known as the administrative threshold, such as the US FDA Certification and European Community COS registration; the second is the customer threshold, also known as the technical threshold, that is, the internal control index, which must not only meet the common standards of international pharmacopoeia, such as USP, EP, JP, etc., but also meet the customer's internal control quality indicators, especially Identify and separate impurities and provide actual samples.Therefore, drug registration is the "golden key" for Hisun to open up overseas markets. As early as 1989, Hisun started the drug administration registration, and obtained the FDA certificate of the first product in 1992. Over the past 10 years, US FDA officials have come to the company for inspection 8 times, 12 varieties have passed the US FDA certification, 10 varieties have been registered in the European Community COS, and 1 variety has obtained the Australian TGA certification.In addition, there are more than 20 products under declaration. However, it is not comprehensive to explain the "Hisun model" only from the above four aspects.Just as evaluating a person requires understanding his growth history, the model analysis of an enterprise is also inseparable from her growth experience.The development of Hisun’s pharmaceutical industry started in 1976 and has mainly gone through the following three stages: 1. Production of pharmaceutical intermediates and bulk raw materials.In the 1970s and 1980s, oxytetracycline, aureomycin hydrochloride, and doxorubicin produced by the company were the main products at this stage. Obtained the FDA certificate of the first product in 1992, and since then Hisun has embarked on a healthy growth track in line with international standards. 2. Transform the production of characteristic raw materials (API + pharmaceutical registration).Since 1998, Hisun has successfully transformed into the specialty API industry.The difference between special raw materials and general raw materials is that the former is the upstream raw material of the product whose patent has just expired.Since the product patent has just expired, the production of drugs has changed from the original monopoly of patented drugs to the multi-production of generic drugs. The price of the product has dropped sharply, and the demand has rapidly increased, so the profit is still considerable.After more than five years of R&D preparation and market preparation, Hisun Pharmaceutical’s simvastatin passed the EU COS certification. In 2003 alone, it contributed nearly 600 million yuan in new revenue to Hisun Pharmaceutical, driving the overall main business Revenue increased by 104%, and operating profit increased by 157%.At present, Hisun's main income still comes from specialty APIs. 3. Avoid the process patent stage (API + drug administration registration + preparation), and extend the industrial chain to preparation production. In June 2005, Hisun's first finished drug workshop and also China's first finished drug workshop passed the EU COS certification. Since then, Hisun has begun to extend the industrial chain to the production of preparations. People who are familiar with the development history of Indian pharmaceutical companies can easily find that the growth history of Hisun Pharmaceutical and Nguyen Company, the second largest pharmaceutical company in India, is strikingly similar. Ruan's Company (Dr.Reddy's) is a representative enterprise in the "India Model", and its development process is mainly divided into three stages. In the first stage, expand the raw material pharmaceutical industry.Ruan's started with the bulk drug ibuprofen. In 1986, it exported the bulk drug methyldopa to Germany for the first time; from 1987 to 1990, the bulk drug passed the FDA inspection, and exported a large amount of non-standard markets such as Russia. The second stage is to transform the characteristic API industry. In 1992 and 1993, sales centers were established in the United States and France respectively. By 2004, the company had a total of 56 specialty API products certified by the FDA, and the sales revenue from specialty APIs was about 175 million US dollars. In the third stage, the industry is fully upgraded.The industrial chain extends to many fields such as preparation production and new drug research and development. From 1994 to 1998, after 4 years of hard work, Ruan's first non-patent drug ranitidine preparation production workshop was certified by the US FDA, which opened up the market for preparation production.So far, Ruan has passed FDA certification for 35 generic drug products, and has sales centers for generic drugs in the United States (headquartered in New Jersey) and Europe (headquartered in the UK). In fact, Hisun Pharmaceutical is currently in the third stage of Nguyen Company.Hisun Pharmaceutical has successfully stepped out of the first two stages. Looking through all kinds of information we have seen, without exception, we say: "Up to now, building product structure advantages based on R&D has constituted Hisun's core competitiveness." At the same time, more than 80% of the products are It is exported and has a very high market share in some international pharmaceutical fields. Among the 24 most effective anti-tumor essential drugs recommended by WHO, Hisun Pharmaceutical’s Doxorubicin and other 5 varieties are listed among them, becoming the global antibiotic anti-tumor drug. One of the enterprises with the most complete varieties and the highest grades of tumor drugs. Indeed, about 90% of Hisun's products are exported, and it has a fairly high market share in some international pharmaceutical fields, especially anti-tumor drugs.The territory of pharmaceutical registration has extended from the United States and the European Community to Canada, Australia and other countries; the content of registration has also extended from raw materials to preparations, and efforts are being made to realize the internationalization of preparations. But we did walk behind the Indians.After the chairman of Baihua came back from India, Hisun began to "learn from India's good example" to accelerate the pace of industrial upgrading. Since the Hisun model is similar to the Indian model, we have to pay attention to it, and it is necessary to deeply analyze the development model of Indian pharmaceutical companies. For a long time, India has often been regarded as a third-world country that can only copy Western products with the help of a loose patent policy.Today, however, the situation is different, and the Indian pharmaceutical industry is leading a revolution in the R&D sector with high percentage growth in R&D spending. In 2004, Ranbaxy spent about 7 percent of its $1 billion in sales on research and development, while Nguyen spent 14 percent of its $446 million in sales in the fiscal year that ended in March. for research and development. The demand growth in the Indian pharmaceutical market is slower than that in the Chinese pharmaceutical market, and the market competition is worse than that in China.However, in the past ten years, a group of Indian pharmaceutical companies have demonstrated the "India model" of rapid growth in the domestic and international markets. In the eyes of many experts, the so-called "Indian model" mainly refers to the successful imitation of foreign patented drugs by some Indian companies.This explanation, however, only scratches the surface of things.In fact, the "India model" should be more accurately understood as: a group of Indian pharmaceutical companies take advantage of the loose domestic patent environment to develop generic drugs, grab the market share of multinational pharmaceutical companies, and complete the original technology and capital accumulation; The transfer of the center of gravity of the raw material medicine industry in the pharmaceutical market and the enlargement of the generic drug market, expand the international market, develop international cooperation, become the main supplier of raw material medicine in the world market, and extend downstream into the production of preparations, intervene in the research and development of new drugs, in order to achieve Continuous upgrading in the pharmaceutical industry value chain. Therefore, the essence of the "India model" is to use its comprehensive low-cost advantages to achieve industrial upgrading; the essence of industrial upgrading is to upgrade R&D and enter the regulated market. This can be seen from the development history of Dr. Reddy's mentioned above.Other companies such as Ranbaxy and Cipla have similar development history.Therefore, we can summarize the development path of Indian pharmaceutical companies as follows: from the production of intermediates & bulk APIs—→production of specialty APIs—→production of patented generic drugs in India and non-regulated markets—→production of generic drugs in regulated markets Production—→production of innovative drugs. Of course, this pattern is also formed under specific circumstances. Before 1970, there were almost no local pharmaceutical companies in India, and most pharmaceutical companies were branches of multinational companies in India. After 1970, Indian local pharmaceutical companies began to appear. However, because Indian laws only protect the process patents of drugs, Indian companies took advantage of domestic patent gaps to imitate patented drugs at will, and then sold them in the country and some non-standard markets, forming a strong imitation capabilities and manufacturing capabilities.Some Indian pharmaceutical companies may have long expected that this method is only a stopgap measure, so they are looking for a new way out - generic generic drugs are sold in foreign regulated markets such as the United States and the European Union - after years of exploration, they finally found a successful way road.Nanxin has now become the tenth largest generic drug manufacturer in the United States.After that, these Indian pharmaceutical companies continued to consolidate their positions through capital operations such as mergers and acquisitions and restructuring, and actively invested in research and development.At present, the research and development investment of several well-known pharmaceutical companies in India has reached 10% of sales revenue. Although there is still a gap with pharmaceutical giants such as Pfizer and Merck, they are far ahead of pharmaceutical companies in my country. The development history of Indian pharmaceutical companies is worth pondering for Chinese pharmaceutical companies.The pharmaceutical industries of India and China have many similarities, such as pharmaceutical market size, low cost, and low industry concentration, but the realms are far apart.While domestic pharmaceutical companies are still fighting to the death in the limited domestic market, Indian pharmaceutical companies have begun to calmly make their mark in the international market.While Chinese companies are proud of domestic acquisitions and mergers, Indian pharmaceutical companies have already moved towards the goal of R&D-oriented multinational pharmaceutical companies.In terms of assets, some large domestic companies may be several times larger than Indian companies such as Nanxin and Nguyen, but big does not mean strong. In terms of profitability and return on assets, my country's pharmaceutical companies still have a lot to make up for. 1. Indian pharmaceutical industry wins in internationalization This Indian dream is not a castle in the air.In fact, India's pharmaceutical industry has achieved rapid development in the past ten years, and many companies have expanded like snowballs.So far, the annual sales of many Indian pharmaceutical companies have exceeded US$100 million. Huayao or Harbin Pharmaceutical Group, which ranks the top in the pharmaceutical field in China, can achieve sales of about 6 billion yuan a year, equivalent to 700 million to 800 million US dollars, which is higher than that of the largest Indian company in terms of sales scale. It is bigger, but the degree of internationalization of the company is far from that of India, and its influence in the world pharmaceutical market cannot be compared with that of large Indian companies. Indian pharmaceutical companies have long wanted to enter the Western pharmaceutical market, and in many ways they have succeeded.In the late 1980s and early 1990s, Cipla, which ranks third among Indian pharmaceutical companies, obtained the license issued by the US FDA for its production facilities, and the drugs produced can be sold to more than 100 countries in the world. countries.At present, 65 drug manufacturers in India have been certified by the World Health Organization (WTO), and more than 20 drug manufacturers have been approved by the FDA. In 2002, the Indian pharmaceutical industry's export sales increased by 14% to $2.1 billion.According to the Indian Pharmaceutical Manufacturers Organization, India's pharmaceutical exports will increase by 25% in 2003.Indian companies are targeting $45 billion worth of medicines that lost patents between 2001 and 2005.Analysts say: Ranbaxy, Dr. Reddy's Laboratories and Cipla are shifting their focus squarely to the US market. 2. Misplaced development, fostering strengths and circumventing weaknesses, and improving international competitiveness Although my country's pharmaceutical companies have international competitiveness in raw materials, they mainly focus on the domestic market in preparation products.Over the years, the production of western medicine preparations in my country has been hovering around US$100 million.Indian companies not only have considerable international competitiveness in raw materials, but also in preparation products with a global focus. In order to realize the export of preparation products to the markets of developed European countries, Indian pharmaceutical companies have taken the initiative to acquire small and medium-sized manufacturers in the target market, and use the brands and sales channels of these companies to integrate their own product chains.Generally speaking, it is relatively easy to enter a new generic drug market by acquiring a company in the target market or the franchise right of a certain product in the target market. India's Sun Pharmaceuticals acquired a pharmaceutical company in Detroit in 1996, investing US$7.5 million to open up access to the US market. Caraco has 9 Abbreviated New Drug Applications (ANDAs) pending approval in the United States and 5~6 drugs pending registration. Ranbaxy acquired Bayer Pasics, a generic drug subsidiary of Bayer, entered the German market, and increased its own drug series to expand the business scope of the acquired company.Currently, the company has 25 drugs registered in Europe (mainly in Germany), with another six under consideration and pursuing opportunities to enter the French and Spanish markets.The company plans to submit at least 10 ANDAs in the US in 2002. Ranbaxy ranks 8th, 19th and 11th in the off-patent market in the UK, US and world categories respectively.Its global non-patent drug strategic model is also very characteristic - pay attention to the patent protection period of generic drugs at any time, once the patent drug protection period of the drug is about to expire, organize research and analysis; once the product patent expires, have Cost-competitive generics can capture substantial market share. 3. Efforts to improve international marketing operation capabilities Indian companies cooperate with local pharmaceutical companies in target markets, and rely heavily on the strength of local companies when exploring new markets. The FDA is considered to be a major obstacle affecting the export of my country's preparations to the United States, but Indian pharmaceutical manufacturers have overcome them skillfully. For example, Cipla has established a series of cooperation with some foreign companies, including Novopharm in Canada and Zenith Goldline, a subsidiary of Ivax in the United States. Thanks to its established relationships with European and American distributor organizations and major generic drug companies, Lupine utilizes its partners' sales channels to distribute its own products. Lupine has registered and marketed cephalosporin for injection in the United States through APPA, and sold the drug through Merck Generic. 4. Actively develop new pharmaceutical preparations In western developed countries, the price difference between the raw materials of pharmaceutical products and pharmaceuticals is generally 1:10, in India it is 1:5.2, and in my country it is generally 1:3. India has about 200 national-level pharmaceutical companies and 23,000 regional-level pharmaceutical companies, and has a strong foundation for drug research and development.In addition to research institutions set up by the government, such as the "National Pharmaceutical Laboratory" in Pune and the "National Pharmaceutical Education and Research Institute" in Mahari, there are also a large number of private research laboratories.Some pharmaceutical companies have their own high-quality internal experimental equipment and have made great achievements in the development of new drug molecules.At present, India is about to enter the patent protection period of products, and many companies are increasing R&D investment. The imitation of Indian pharmaceutical companies is not simply imitation, but innovation in imitation.For example, Lupine Laboratories has developed cefotaxime that does not infringe the existing patented technology to produce Japan's Takeda. Ranbaxy Company is even more exemplary. It authorized its ciprofloxacin (ciprofloxacin) once-a-day relief preparation to Germany Bayer AG for operation. The latter had submitted a new drug clinical research application to the US FDA in December 2000 (IND), Bayer will pay Ranbaxy the initial franchise fee after research and development; a drug of Ranbaxy for the treatment of benign prostatic hyperplasia (BPH) has entered phase II clinical research in India, and the company plans to launch it in the UK to facilitate UK registered. Indian pharmaceuticals are engaged in generic drugs to lay a solid foundation for the final development and research of new drugs.Dilip G. Shah, secretary-general of the Indian Pharmaceutical Association (IPA), pointed out that the goal of Indian pharmaceutical companies is to become the world's leading company in generic drugs, occupy at least 10% of the market share, and use the experience of generic drugs to create new products in the future. own branded medicines. 5. Put talent training at the top of competitive strategy The salary system of Indian pharmaceutical companies is conducive to attracting high-level technical and management talents.The salaries of technicians in Indian pharmaceutical factories are quite high. The salaries of the main researchers of some drugs are generally more than 30,000 US dollars per year, and some add 25% of the first year's sales profit. Sun Pharmaceutical recruited a management talent who was the president of Asia from a foreign company, with an annual salary of 4 million yuan.These strategies that are willing to spend money have enabled Indian pharmaceutical companies to form a strong scientific research force and management level, and have the strength to impact the world's pharmaceutical market. 6. India's pharmaceutical industry policy is conducive to the development of enterprises In the past 10 years, the Indian government has vigorously supported the production of raw materials including antibiotics, and has formulated several policies to promote the development of the pharmaceutical industry.India's policy is very loose on generic drugs. Drugs that can pass the FDA's approval to be marketed in the United States do not need to do clinical research in India, as long as Indian companies can make and market information in the United States within 9 months. listed.However, our country still needs to do experiments for several years, which has cost enterprises a lot of money and wasted precious time.Moreover, the requirements of relevant departments in our country are more complicated than that of the US FDA.For example, the US FDA does not require the origin of raw materials, as long as they can meet the quality requirements, they can be marketed.China's Food and Drug Administration is the only government agency in the world that also requires import licenses for pharmaceutical raw materials. Bai Hua, chairman of Hisun, said: "The biggest challenge Hisun is currently facing is the fierce competition from European and American pharmaceutical companies and Indian pharmaceutical companies. Hisun develops according to the current routine, and it is still possible to solve the current food problem. But in the long run, it will not work without independent research and development and innovative drugs.” I believe that everyone who cares about the development of Hisun Pharmaceutical can see that: In terms of generic drugs, Hisun’s biggest international competitor is Indian pharmaceutical companies, and the domestic competition is mainly due to the low prices of small and medium-sized pharmaceutical companies. Sale.In the end, Hisun Pharmaceutical still has to develop in the direction of patented drugs. However, in fact, as far as the actual development is concerned, not only Hisun, but all pharmaceutical companies in China will surely embark on the growth path of generic drugs, and in the future, they must engage in patented drugs and conduct independent research and development.Only in this way can China's pharmaceutical industry truly become bigger and stronger. However, Chairman Baihua of Hisun also showed us the difficulty of Chinese pharmaceutical companies walking on this road.Generally speaking, the routine development process of generic drugs consists of the following three aspects: (1) Raw material drug: the whole process of raw material drug from laboratory testing→small test→pilot test→production line should be completed; (2) Preparation: To complete the finished product, the whole process of exploratory test → scale-up test → bioequivalence test shall be completed; (3) Sales: To obtain relevant certification, it usually takes 18-24 months to obtain US FDA certification. Adding up these three processes, it will take 8-10 years in total.It took India's Nanxin Company and Nguyen Company 10 years to go this route, and it took Lupine 7 years.Proprietary drugs take longer to produce and sell, and cost more money. However, no matter how difficult it is, Hisun is determined to walk on this "road of no return", because: if it does not make finished products, the raw materials cannot be sold.At present, Indian pharmaceutical companies have formed a complete generic drug industry chain.If Hisun cannot extend its industrial line and turn raw materials into finished drugs, it will always be in the lower reaches of the Indians. Today's Hisun is on the cusp of the storm.In order to realize the development of non-patent drugs, there are three alternative paths: one is to independently develop patented drugs that avoid technology and produce them for foreign countries; the other is to cooperate with multinational companies to develop preparation drugs.The third is to directly purchase the patents of phase III clinical trials of large foreign companies for production. The heavy burden of medical expenses from European and American governments has prompted them to look for opportunities for low-cost APIs to serve preparation factories, especially the low-cost API factories they are looking for have changed from Spain, Italy, and South Korea to China and India. The reality has made Hisun gradually grow from an unknown small factory.At present, American pharmaceutical companies are gradually shifting the manufacturing of products whose patents are about to expire, and transferring the production lines out. Hisun is seizing this opportunity to undertake the industrial transfer. In August 2005, Hisun reached an agreement with Eli Lilly and Company, one of the top 10 patented pharmaceutical companies in the world, and officially took Hisun's first step towards non-patented drugs and entered the production sequence of pharmaceutical preparations. In the future, the development of Hisun will be based on the existing API (producer of specialty raw materials), take advantage of Hisun's equipment versatility, avoid the rational use of process patents, and turn to the production of preparations to create Hisun's own Brand, and then increase the R&D and production of innovative drugs through venture capital, acquisition of small and medium-sized companies in the United States, and establishment of R&D institutions abroad.This is the future growth path of Hisun. Correspondingly, Hisun's characteristic "fish theory" will also be further expanded.Hisun has also been able to realize healthy growth of the enterprise. At present, Chinese companies are also facing the favorable environment that once created the rapid growth of Indian pharmaceutical companies.It is reported that many American non-patent drug companies have asked the American Intercontinental Pharmaceutical Company to help them find suitable raw material drug manufacturers in China, so as to reduce pharmaceutical costs. The trend of shifting the production of raw material drugs to developing countries is obvious. According to industry experts, compared with Indian pharmaceutical companies, the advantages of Chinese companies are mainly reflected in cost, production technology and research and development.Especially for the research and development of raw materials, Chinese R&D personnel often spend a short time and the quality is good; in addition, China is much richer in chemical resources than India, and China is a major exporter of chemical intermediates, which India cannot compare with. The climate and environment are also more suitable for the production of chemical drugs. In the production steps of chemical drugs, the most critical are fermentation and synthesis. These two processes are not suitable for hot and humid places; The cost is comparable to that of India, and there is not much difference between the two sides. Since the "9.11" incident, the U.S. government has implemented a policy of reducing medical expenses. In order to reduce production costs, the government has called on non-patent drug manufacturers to outsource the production of APIs. As a result, the trend of outsourcing APIs has become more and more obvious in the United States.And this is a good time for the great development of Chinese pharmaceutical companies. The price of APIs in the US regulated market is often more than ten times higher than the domestic price, and once confirmed, there will be at least a sales period of more than 3 years. The volume is still very stable from the sales channel.If Chinese pharmaceutical companies can improve the versatility of their products (obtain a "passport" in the regulated market) and the research and development of generic drugs and innovative drugs, they will be able to realize the industrial upgrading of China's pharmaceutical industry and become one of the world's pharmaceutical powers.