The Indian pharma industry is not worried about the possible benefits for Chinese biotech firms following the exclusion of the Biosecure Act, aimed at blacklisting them, from a key US defence budget Bill.
Domestic pharma players are betting on the Act, which still stands to blacklist five Chinese biotech firms from federally-funded research and contracts. “The defence Bill doesn’t override the Biosecure Act. Both Acts are independent of each other. We don’t anticipate any adverse impact on the domestic pharma industry,” said Viranchi Shah, national president, Indian Drugs Manufacturers Association.
The Biosecure Act, passed by the US House of Representatives in September, benefits Indian drugmakers as it excludes Chinese companies from the US biotech supply chain. As a result, Indian CDMOs (contract development and manufacturing organisations) and CROs (contract research organisations) were poised to gain market share in the US.
Currently, the Chinese CDMO industry controls 8% global market, compared with India’s 2.7%. The Act gave an opportunity to domestic companies to dent China’s share. “The defence legislation has said it will not exclude Chinese firms, but it is not going to have any say over the Biosecure Act. Even if some US defence contracts go to China, their value will be limited in comparison to the overall market,” said the head of a pharma association.
The Biosecure Act was left out of the annual US national defence authorisation Bill, providing a breather to Chinese biotech firms BGI Group, MGI Tech, Complete Genomics, WuXi AppTec and WuXi Biologics. Even in the case of Chinese exclusion, Indian firms will still have to compete with firms from Ireland and Singapore. In addition, transitioning from complex collaborations where Chinese companies are already involved is going to take time. The grandfathering clause in the Biosecure Act allows existing contracts with China to continue till 2032.
Experts argue that despite the current developments, the growth of Indian CDMOs and CROs will pick up pace due to the overall favourable environment. According to Mordor Intelligence, the contract manufacturing market is set to double over the next five years to $44.63 billion. The contract research market is likely to witness a 10.75% CAGR (compounded annual growth rate) to reach $2.5 billion by 2030, according to government estimates.
