Indian Drugmakers Break Into China with Major Supply Wins

Indian pharma companies Cipla, Natco Pharma, Hetero Labs, and Annora Pharma have achieved a breakthrough in China after securing key bids to supply generic drugs under the country’s latest volume-based procurement (VBP) program.

The selection marks a significant milestone in India’s efforts to expand its pharmaceutical presence in the tightly regulated Chinese market.

Hetero Labs and Cipla were among seven global firms chosen to supply one billion tablets of Dapagliflozin, a diabetes treatment that dominates China’s small-molecule drug segment, with sales exceeding eight billion RMB in 2024.

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Natco Pharma won a bid to supply Olaparib Tablets, while Annora Pharma secured rights to deliver Oxcarbazepine Tablets. The Chinese arm of Dr. Reddy’s Laboratories also gained approval for four products.

The latest VBP round included 55 therapeutic categories and 453 products, with 272 companies pre-selected. Indian firms collectively secured contracts to supply seven drugs—an encouraging sign, according to industry executives, as India aims to penetrate a market long dominated by Chinese and multinational players.

While the high-volume contracts promise scale, margins are tight as China awards bids to firms offering the lowest prices. Officials noted, “It is challenging to compete with Chinese companies who have cost leadership being backward integrated into APIs.” Despite this, participation in the VBP scheme is seen as the only viable route for Indian drugmakers to tap into China’s vast market potential, especially as both nations explore ways to balance their growing trade deficit.