India's Contract Research and Manufacturing Sector Set for Growth

December 4, 2014
Adeline Siew, PhD

Adeline Siew is editor for Pharmaceutical Technology Europe. She is also science editor for Pharmaceutical Technology.

Generic drug manufacturing is no longer the only driver for growth in India's pharmaceutical market as more companies start investing in R&D.

CPhI, in partnership with Global Business Reports (GBR), has released a report on pharmaceutical industry trends in India. In terms of volume, the country contributes approximately 10% to the global pharmaceutical market and ranks among the top two to three pharmaceutical producers, especially when it comes to generic drugs.

According to the report, India is gaining regulators’ trust now that quality standards are improving among Indian manufacturers. In fact, India is said to have the most number of FDA-approved sites outside the United States. There are currently 10,500 manufacturing facilities, including 1400 GMP approved production plants, and more than 3000 pharmaceutical companies growing at an exceptional rate.

The big players in India are set to experience growth in contract research and manufacturing services (CRAMS) for patented products. India Brand Equity Foundation (IBEF) has estimated that the country’s CRAMS industry will grow from $4 billion in 2012 to $8 billion in 2015. The cost advantages will be a key driver in the shift away from Western markets to the subcontinent. And it is expected that more partnerships will be formed between Big Pharma and Indian CDMOs.

Although growth has been mainly driven by generic drug production, the larger firms in India are now beginning to take on R&D projects mainly focused on advanced drug delivery systems, formulation and manufacturing technology, and biosimilars. IBEF noted that India is attracting more investments and R&D expenditure by 30 of the top pharmaceutical companies in India rose by 19.7% in the financial year leading up to March 2013.

Interest in developing new chemical entities (NCEs) is also mounting. Daara Patel, secretary general, Indian Drug Manufacturers’ Association (IDMA) commented in the report that with pipelines drying up and companies now investing more in R&D, we can expect India to come up with new molecules over the next few years. While this area is still perceived as high-risk, with most pharmaceutical companies hesitant to commit substantial investment into true discovery programs, progress can be seen with Biocon’s development of an oral insulin formulation, which has the potential to be a breakthrough innovation if the product hits the market.  

Some Indian companies are extending their R&D base to Western countries where it is believed that the technology and expertise would compensate for the higher costs. Lupin, which is headquartered in Mumbai, India, for example, has announced plans to set up two R&D centers in the US. Cipla, also based in Mumbai, is working in collaboration with the British government to invest $166 million for research and clinical trials to development drugs for respiratory and oncology related disease in the United Kingdom.

Source: CPhI Indian Pharmaceuticals 2015 – Industry Explorations