Chinese agchem enterprises seizing market for patent-expired pesticide

By 2023, 166 worldwide pesticide-related patents are going to expire, which is expected to generate a market value of US$11 billion. According to the statistics of Agropages, nearly 40 patented products of international pesticide enterprises will expire in China from 2013 to 2016, which is expected to generate a market value of over Yuan 2 billion, providing Chinese agrochemical enterprises with a good opportunity. However it is not easy to seize the opportunity, as a hidden combat in the business has taken place between Chinese agrochemical enterprises and international companies.

According to the information of Agropages, Chinese pesticide enterprises spend only around 2% of annual sales on R & D activities while the R & D spending of international companies reached about 10% of annual sales. Therefore it is very difficult for Chinese enterprises to develop product with independent intellectual property, bearing in mind that in recent years the landing of overseas patented product has already put down the traditional pesticide market. Under such a circumstance, Chinese enterprises have started to target at the patented product which will soon expire and have speeded up the progress of registration of the expired compounds. Taking azoxystrobin (patented compound of Syngenta) as an example, over 200 enterprises registered the azoxystrobin in China just 1 year after its expiry in 2012; for thiamethoxam there were also registrations by more than 100 enterprises. Furthermore for several other patented compounds which will expire soon like dinotefuran and pyraclostrobin, hundreds of enterprises are conducting field trials right now in preparation for registration.

However on the other side international pesticide enterprises are also taking measures to safeguard their market share, for instance via application for patent of intermediate, production process and mixtures in a purpose to raise the production entry level. An example is the mesotrione /atrazine of Syngenta, although mesotrione has expired, yet the mixture will remain valid until 2015.

Moreover, technical barrier is hindering Chinese enterprises to develop the patent-expired product. For example, the patent right of spinosad expired several years ago and some Chinese enterprises obtained certifications of related formulations, but there has been no productions. The main reason is that spinosad is made through a special fermentation process, which requires high degree of purity and biological activity; no Chinese enterprises are able to produce conformable spinosadis technical, resulting in non-availability of mature product in the market.

Chinese enterprises may need to evaluate and acknowledge their R & D capacity and the market situation as how to develop a strategy to make the most out of the patent-expired pesticide other than just follow others blindly without a proper plan.