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China and India: Promising growth, ongoing challenges

Growth in the Chinese pharmaceutical sector was evident at the China-Pharm 2007 show last November in Shanghai.

Although attendance at the show was reportedly down slightly compared with previous events, attendees proved to be qualified, well informed, and focused on specific projects. The push by the Chinese government to improve healthcare delivery and drug quality is having a definite impact.

The proliferation of Chinese manufacturers "imitating" successful international providers of pharmaceutical manufacturing and packaging machinery was impressive. Several suppliers and customers indicated they were impressed by the initial quality of equipment being offered by "generic" Chinese manufacturers, but that service and support appeared to be somewhat problematic.

It seems that the reverse engineering of equipment has not carried with it the understanding of machine functionality, resulting in a lack of ability to properly service and maintain the machinery. Understanding long-term reliability and the need to meet safety guidelines also seem somewhat suspect. It is one thing to copy a piece of equipment, and quite another to fully understand its design as related to its function.

Travel to Chengdu and Beijing provided further insight into the explosive growth occurring in the business centers of China. Much of the construction in Beijing is geared for the Olympics scheduled for later in 2008, but it benefits basic infrastructure, with improvements in highways and extensive housing projects.

Many signs are in Chinese and English. The availability of government assistance to support certain market segments is driving construction of large manufacturing complexes. Many of these complexes include factory-provided housing for the workers. The philosophy is that if decent, affordable housing is provided (or mandated), the workforce will remain more stable. Many of the middle managers in these high-growth companies are young (less than 30), multilingual, and eager to learn from their visitors.

It will be interesting to see the differences when the China-Pharm 2008 show (www.chinapharmex.com/english) shifts to Beijing November 12–14. China-Pharm 2008 will be the 13th China International Pharmaceutical Industry Exhibition.

Pharmaceutical growth shows in India
India offers a bit of a contrast. The same high-intensity growth is taking place in the major cities, and the pharmaceutical sector is experiencing tremendous growth.

There is an increased emphasis on healthcare for the general population, and there is an effort to become more closely tied to the U.S. market. Many companies at China-Pharm sought to increase not only their domestic market presence, but also in what's perceived as the more lucrative U.S. and E.U. marketplaces.

Regulatory concerns are voiced by the major players, which concentrate on meeting the harmonization standards of multiple regulatory environments (much like their U.S. and E.U. counterparts). Company expansions are being funded by the private sector rather than with governmental support. The local drug market is generally price-fixed by the government, and it is becoming increasingly difficult for some companies to compete at the dictated pricing levels.

Infrastructure is being upgraded and modernized, with major additions to mass transit in Delhi underway. As the traffic paralysis increases, construction of technical centers and manufacturing complexes is moving further outward from the city centers. The new facilities are state-of-the-art, with attention being paid to the international standards required to compete in the markets outside of India. [HCP]

Chuck Reed is the director of sales & marketing for Weiler Engineering, Inc. (www.weilerengineering.com), a manufacturer of aseptic blow/fill/seal machinery, who recently traveled to China and India.
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