The prospects of active pharmaceutical intermediates (API) and excipients markets in India is quite high owing to the ever growing bulk drugs and formulation industry in the country. The Indian pharma industry growth has been fuelled by exports and its products are exported to almost all countries with a sizeable share in the advanced regulated markets of US and Western Europe.
The domestic pharma industry ranks fourth globally in terms of volume and 13 in terms of value. More so, the domestic companies are keeping abreast with the global developments and adopting new technologies in Good Manufacturing Practice (GMP) compliant facilities for manufacturing.
The API industry has come a long way in providing medicines to the masses at affordable prices. “We are proud of the fact that of the current total production of above Rs. 67000 crore worth of bulk drugs and formulations in India. Over 75 per cent are produced by the indigenous drug producers. Similarly the indigenous sector is responsible for most of the Indian pharmaceutical exports i.e. over 30,000 crore” said, Dr Appaji, executive director, Pharmexcil.
During 2003-2007, the Indian pharma industry grew by 13 per cent driven by rising consumption levels in the country and strong demands from export markets. In 2006-07, the Indian pharma market reached US$ 8.16 billion and reached to US$ 9.77 billion in 2007-08. At present the industry constitutes 1-2 per cent of the global pharmaceutical market in value terms. Today India ranks alongside China as one of the world’s top pharmaceutical markets with the highest growth rates. Now India is catching with the world in every aspect and it is more focusing on self-developed medicines and contract research and production for western drugs companies.
Nevertheless, significant infrastructure problems are preventing the sector from developing. It has been rated far behind in the quality and quantity especially in energy and transport. In fact Indian drug sales are estimated to rise by eight per cent by the year 2015. But if the infrastructure problems are nullified and remedied quickly, growth would be a little higher.
In the meanwhile the global outlook for the API market is on the upswing. The near terms prospects for markets from the US and other regions have strengthened and expects higher demand. India will be one of the key providers for API and excipients, according to pharma companies.
Leading API players including Hikal, Biocon, Dr Reddy’s Labs, Jubilant Life Sciences, RL Fine Chem, Shilpa Medicare among others are optimistic that business prospects would be bright going by the strengths of capability and cost which are now driving sector.
The positive factors favouring India are affordable product development costs, complex synthesis competence, cGMP compliance and a large base API producers. With India among the leading nations in the BRIC category , the companies in the region have enhanced their investments in to research and development which will help to offer wider portfolio of products in the space, said sources from Hikal which is an outsourcing partner to companies for APIs and intermediates .
In fact the sector in India is recognized for its highest number of approvals in drug master filings (DMFs) in the US and Certificates of Suitability (CoS) in Europe. The country is also the third in the world for its ability to manufacture 500 different APIs after China and Italy and with the largest number of US FDA approved plants outside US.
India is fast emerging as an attractive choice for API outsourcing due to low development costs, complex synthesis capabilities, cGMP compliance and a large domestic market. With increased investments in R&D and focus on quality as well as cost, Indian companies could out-compete firms from many other nations and gain salience in the international market.
The cost -cutting measures by the US and highly regulated countries in healthcare segment has pushed up the demand for low cost generics. As a part of cost cutting measures, many multinational players have started sourcing bulk drugs from cost competitive destinations during last few years. Such a shift has provided India with immense opportunity for growth and Indian companies have emerged as the preferred supplier for APIs the world over.
Moreover several blockbuster brands had lost exclusivity during last couple of years and more are losing in the coming years. While this has helped in the overall growth in API operations , Indian players could successfully cash in on this opportunity. It is estimated that 40 per cent of the world's API requirement is met by India.
With the high quality standard of APIs produced in India, it is high time the Brazilian regulatory authority ANVISA starts accepting the Indian pharmacopoeia. This would help Indian companies tap more opportunities. While there are not many exports to Brazil and the focus is more on formulations, India cannot be ignored when it comes to APIs, said Kaushik Desai, chairman, Industrial Pharmacy Division, Indian Pharmaceutical Association.
According to Manoj C Palrecha, managing director, Lake Chemicals, the market for APIs across the globe is transcending from a price sensitive phase to a quality conscious one. Among the price conscious countries are Latin America and South East Asia. But the global slowdown has seen a huge interest from the Big Pharma of the West to look at quality conscious and price beneficial markets like India. The country’s expertise and plants will drive the opportunities.
Now with the crisis following the Standard & Poor's US credit rating downgrade and with the EU economy in turmoil, many companies are in financial distress. The situation could create growing business opportunities for Indian API players. But companies will have to make a prudent selection of customers they want to associate with, said industry sources.
For Indian API market, the big issue is the menace of companies from China trading low cost and poor quality products, said Anjan K Roy, managing director, RL Fine Chem.