Pharma cos bet big on CRAM, more to join the bandwagon

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Chennai, Mar 22: The Indian pharmaceutical industry is gearing up to exploit the over $35 billion global contract research and manufacturing (CRAM) business in a big way.

Given the huge competition, increasing research costs, time-to-market problems, global pharma majors are looking at sourcing from Indian pharma companies, industry officials say.

If the recent $60 million order from global life science majors to Jubilant Organosys, over $10 million contract each from three to four global majors to Chennai-based Shasun Chemicals and a few other major orders to Nicholas Piramal, Divis Lab, Dishman Pharma are any indication, Indian pharma companies are certain to benefit immensely from the CRAM business, officials added.

Astra Zenca, Pfizer, Eli Lily, GSK, Merck, Allergan amongst host of global companies are increasingly outsourcing their demands from Indian CRAM companies.

Towards this, many Indian pharma companies, including Jubilant Organosys, Shasun, Divis Lab, have upgraded their manufacturing facilities with hundreds of crore investments recently.

Notwithstanding, these companies have also received or in the process of getting USFDA, MHRA approvals to target the US and European companies, the sources pointed out.

According to Vimal Kumar, joint managing director, Shasun Chemicals, “CRAM is a new buzzword amongst the Indian pharma companies. There are at least 10 major pharma companies actively involved in CRAM business in a major way and more companies are expected to enter the fray soon.”

“India not only considered to be a low-cost manufacturing base, but also offers quality skill sets apart from maneuvering environmental issues. The CRAM business in India is growing between 25% and 30% annually and with more and more multinationals approaching India, we expect the same to grow around 40%,” Kumar said.

“India may attract one-tenth of the over $35 billion business in the next two to three years,” he added.

Shyam S Bhartia, chairman & managing director of Jubilant Organosys, opined that with India emerging as a cost competitive outsourcing base for global majors the industry hopes to garner such major deals in the future. With a strong intellectual knowledge base and proven capabilities to develop cost-efficient solutions Indian companies expect to play a major role in global CRAM business, he added.