From December 1 to 3, 2010, United Business Media held Asia’s biggest pharmaceutical event in Mumbai, exemplifying the increasing importance the region plays for the industry.

The recent event was held in partnership with Pharmaceuticals Export Promotion Council, with about 52 percent of participants coming from India and 40 percent coming from China. European firms were the next most well represented after their Asian counterparts.

According to industry experts, the pharmaceutical sector in China and India has been growing at a pace of roughly 15 percent to 20 percent year-on-year over the past several years, which is slightly more than 1.5 times as fast as the growth of each country’s GDP.

As each country grows, an increasingly educated population drives down the cost of inputs for research and development, a growing middle-class has more money to spend on medicine, and as time passes, an aging population will continue to have a markedly higher demand for such products.

But, as in all things business-related, analysts have constructed somewhat of a contest between the two growing economies as to what exactly the future holds for each country’s pharmaceutical industry.

"China arguably ranks as the best pharmaceutical outsourcing destination among all Asian territories when looking at the multiple factors of cost, risks and market opportunities," reads a recent report by PriceWaterhouseCooper. Pharmaceutical outsourcing territories in the Asia-Pacific region include Australia, China, India, Indonesia, Japan, South Korea, Malaysia, the Philippines, Singapore, Taiwan and Thailand.

China offers "significant savings in labor and laboratory set-up costs, as well as strong government incentive programs such as tax holidays, tax cuts and value-added tax exemptions."

An opposing voice, Indian Minister of State for Chemicals and Fertilizers, Srikant Kumar Jena, believes otherwise.

"The Indian pharmaceutical industry is now over US$ 20 billion. India ranks 14th in terms of value," the minister argues. "The country ranks fourth in terms of generic production and 17th in terms of export value of bulk actives and dosage forms. By 2015, India is expected to rank among the top 10 global pharmaceutical markets."

Regardless, problems do exist, and may weigh on the growth of each country’s industry.

One significant challenge that faces India’s pharma-tech sector in the years to come is its lack of sound infrastructure. Consistent access to electricity remains a major obstacle, as does the quality and congestion of the country’s roads.

Foreign companies seeking to compete in the two countries continue to complain of lax intellectual property protection, and point to escalating competition from generic drug-makers who openly challenge patents held in the United States and Europe.