Contract Manufacturing Sees 20% Growth in India
News Sep 29, 2015
The past few decades have been very productive for India, as it took a major leap from pharmaceutical production, to include contract manufacturing. As per the President of the Indian Drug Manufacturers’ Association (IDMA), Mr S V Veerramani, the overall pharma contract manufacturing industry is growing at 20%, providing a burgeoning opportunity for small and medium enterprises.
The current market value is estimated at 50% of the domestic production, which roughly translates to US$ 5.3 bn. Multinationals hold a generous 20-25% stake in the domestic pharmaceutical market.
For the basic manufacture of medical products and drugs, India has a far superior edge over nations such as China, Vietnam and Ireland, due to resources including manpower, technically knowledgeable work force, and WHO-GMP approved production premises. A substantial 40% lower cost of operation and production is clearly the highlight for multinationals to consider India for their outsourcing needs.
With the advent of multinational pharmaceutical organizations, and their rapidly growing presence in the country, the concept of contract manufacturing has steadily evolved and quickly adapted, so as to encompass services such as basic manufacturing of medicinal products, formulation development, stability studies, and various stages of clinical trials.
In addition, scale-up of drug syntheses, and late clinical trial studies have also been profitable protocols in this sphere. The Drug Technical Advisory Board (DTAB) has agreed to grant a waiver to Phase III studies of certain drugs in India, which are from the regulated markets of US and EU. This step is an incentive for many pharmaceutical organizations to focus on India, as the cost savings could be enormous.
Also it is estimated that patented drugs worth US$ 85 bn in potential annual sales in the USA would be off patent during the period 2014-2020. Price competitiveness and manufacture of these generic drugs in the most cost efficient manner would be the key drivers boosting the prospects of the Indian players as India is known to have the world’s best known low-cost manufacturing centers, with the highest number of U.S. Food and Drug Administration (USFDA) approved manufacturing plants outside the US.
The government is also looking at incentivizing the upgradation of Schedule M facilities to WHO GMP complaint units with the help of soft loans, which would lead to additional 1000 units being certified WHO-GMP compliant, further corroborating the manufacturing processes.
Dr P V Appaji, Director General Pharmexcil, mentioned that multinational companies in India have stopped manufacturing some of their products and have outsourced to Indian manufacturers. Products which are even brand leaders in its segments are also outsourced to many Indian companies and yet could retain its market share.
The rising cost of manufacturing and some of the ageing plants of Europe reaching their life cycle conclusion may open up enormous opportunities to India’s companies in contract manufacturing as European companies are also considering to either relocate those units in cost efficient centres like India or to outsource to India manufacturers.
Beside, last five years or even more the innovative products introduced do not command vary large market value and are not block busters as they used to be earlier. Research Pipeline though now getting moderately filled, may have only moderate advantage over the existing products and hence very few of them may go on to become real block busters. Hence MNCs are now adopting the strategy of marketing the brand even after the product goes off patent by slashing down their brand’s price to the level of generics.
Hence to get the maximum mileage of their brands they are looking to outsource their manufacturing to more cost efficient, centres, like India and yet retain their quality and brand image. This is a newer opportunity of contract manufacturing opening up.
This trend is on the rise in the domestic market and India is making an appropriate move by inviting Japan’s pharma industry to locate their units in India either wholly owned or in joint partnership with India companies. Japan’s companies are considering India’s offer with keen interest. “Our idea is to promote Indian generics in the international markets. Around 20 Japanese companies have already evinced interest in leveraging the contract manufacturing benefits from the US FDA-approved facilities in India” as per Dr P V Appaji.
The contract manufacturing space in India is expected to gain grounds in the near future and expected to grow by 17-18 per cent on a compound annual growth rate as efficiency in manufacturing and maturity of business models would lead to containment of cost of manufacturing to a great extent.
Targeted Drug Could be Used to Treat Advanced Cancers Located Anywhere in the BodyNews
A new targeted drug could be used to treat a small number of advanced cancers no matter where they grow in the body.READ MORE
Investigational Drug for Melanoma Shows Promise in Early-Stage StudyNews
An investigational compound designed to block a hyperactive cell growth signal in advanced melanoma and other cancers has shown some promise in an early-stage clinical trial researchers have reported.READ MORE
Scientists Report The Development of a Potent New Medicine to Fight AddictionNews
Scientists report the development of a potent new medicine to fight addiction.READ MORE