India, with its inherent competitive advantages and cost-effective manufacturing capabilities, has now become one of the most preferred destinations for Contract Research and Manufacturing Services (CRAMS).
India holds huge potential to tap the $20 billion CRAMSbusiness, which is expected to reach $31 billion by 2010, said KPMG-CII?s just released report on ?India Pharma Inc?A continuing success story?.
India, with its intrinsic competitive advantages, remains as one of the most preferred outsourcing destinations and is now playing a vital role in manufacturing as well as drug development value chain of various innovator pharma companies. It has become a strategic imperative for global pharma companies to make India an integral part of their manufacturing value chain to maintain lean cost structures and combat intense competition in the global generics industry, the report said. ?MNC pharma companies are increasingly focusing on realigning their manufacturing activities in order to concentrate on core activities such as R&D and brand building?a there by reinforcing the potential for cost savings through contract manufacturing. At the same time, existing global CRAMS players are facing adverse business conditions, on account of increasing regulatory compliances on environmental issues and competition from low cost countries,? the report pointed out.
According to the report, Pharma multinationals are also increasingly using India as a base for exports not only to the immediate neighboring markets, but also to other markets around the world such as Japan, South Africa, Latin America and Europe.
Pharma multinationals are also exploiting India?s competencies in the field of information technology and its strong and low cost IT skill sets; by setting up centers for their global clinical data management functions in India. At present, a majority of clinical trials conducted in India are for Phase-II and Phase-III.
The government is in the process of considering the recommendation of the Drug Technical Advisory Board (DTAB) to allow Phase-I clinical trials for the drugs discovered abroad. If this happens, then it will enable the Indian CRAMS industry to provide a wide range of drug discovery services.
On the other hand, contract research also offers significant opportunity to the Indian pharma industry which is becoming a global R&D hot-spot for innovator pharma companies. The global contract research opportunity was pegged at $14 billion in 2006 and is expected to reach $24 billion by 2010. Declining R&D productivity, coupled with an increasing number of products going off patent is expected to drive the growth of the contract research segment, the report further said.
On the generics side, over the last few years, though the Indian pharma companies have been scaling up their presence in the non-traditional business segments, generics continue to remain the mainstay of the industry. Globally, the generics industry is expected to grow at a Compound Annual Growth Rate (CAGR) of 11% between 2006-2010 and touch $94 billion by 2010.