Q: So what do you see happening to worldwide MDI manufacturing in the future?
A: In one word, internationalization. It has not been easy, and there have been numerous setbacks in qualification processes, but there is little doubt that a core of developing world respiratory medication companies will steadily breach the defences of these strongholds of western pharmacy.
The first thing that is clear is that prices of generic respiratory medications in the West will fall. How far and how fast will depend upon the age-old law of supply and demand, for each drug in each market. The consequences for the industry are harder to predict, but three possibilities stand out.
First, the advent of new players from the developing world in the generic MDI manufacturing industry will tend to cause considerable turmoil in this rather static market. Traditional Western generic manufacturers who have seen this competitive shock coming and have readied themselves for the pricing upheaval that will surely follow will probably survive and prosper; those with a “business as usual” aspiration may well be in trouble.
On the other hand, a number of developing world companies are going after the Western generic MDI markets, investing large sums in bringing forward compliant and registerable products. It is very possible that if these companies have overreached themselves in the size of investment made to access these markets, they could badly burn their fingers when they suffer through the ensuing price collapse, along with their developed world competitors.
Lastly, it should not be thought that this interest in entering new markets is all one way. Established developed world respiratory dosage form companies view the booming economies of the developing world and the associated rapidly growing inhaled medications markets with equal interest. This must surely lead to the market becoming ever more a global one and to the slow death of some of the more quirky regional markets of the past.
We can expect to see a market of, perhaps, a hundred or so MDI companies worldwide, slowly rationalize to perhaps half that number or less, with perhaps five or six responsible for 80% or so of world manufacturing volume.
Quality standards will tend to converge, by and large by levelling up, to a more or less universal (ICH) level of quality. Economies of scale linked to the requirements of the export markets will slowly isolate and then freeze out local companies working in more “traditional” ways. However, there still will remain, no doubt, some areas if difference between the extreme position of US quality requirements, and the slowly converging standard of the rest of the world.
