Sun Pharma eyes potential in China
India’s largest drugmaker Sun Pharma is confident of scaling up its business in the US$ 160 billion Chinese pharmaceutical market over the next 6-9 months. China has embarked on a huge multi-city drug procurement programme across cities, which is driving down drug prices. Under this programme, China is importing drugs at a brisk pace and putting approvals on new drugs on fast-track mode to ensure that they reach the patients as soon as possible. Moreover, drugs approved by the US get faster clearance, a definite advantage for Indian firms.
It also provides opportunities to Indian pharma companies like Sun Pharma, whose competitors like Dr Reddy’s Laboratories and Cipla Ltd have already entered the Chinese market. Sun Pharma has a miniscule presence in China at present, but founder Dilip Shanghvi is confident of having significant traction in the market over a period of three years.
According to Jeffries analyst Piyush Nahar, China is a lucrative market due to reforms, but expanding in China requires a higher upfront expenditure and Sun Pharma will need to rope in a distribution partner.