India, currently the third largest API player after China and Italy is expected to be the second largest after China by 2010. According to a report by the 'Tata Strategic Management Group', in the year 2007, API exports from India was to the tune of US$ 3.75 billion and is expected to reach US$ 12.75 billion by 2012.
Indian API manufacturing companies have some inherent strength, which other companies will find hard to compete with. For example India can offer an API where production costs are 50 per cent lower than that prevailing in western countries.
India currently has about 3,000 API factories and 5,000 reagent factories. So an investor will get a good number of options within India for a single molecule.
Large number of regulatory approved facilities by USFDA, TGA, EMEA, UK-MHRA and other regulatory agencies in Europe etc.
All these facilities are having well equipped infrastructure, meeting the regulated market standards in terms of design, development and manufacturing from R&D level batches to commercial batches along with automated testing equipments and systems.
The technical staff supporting the API business in India is knowledgeable, competent enough to understand the key factors of any regulated market needs; identify and meet the objective of the API and thus handling the regulatory inspections and client queries. The strength lies in massive, well-educated, English-speaking labour force.
The API manufacturers are supported by instrument and equipment manufacturers in providing the required design of automated machinery, equipment originating from India.
The IT hub in India is also being supportive to the API manufacturers in a variety of data management and computational system functions.
According to current statistics, India plays an important role in the global API market. In 2005, the API global market was US$31 billion and India had sales of US$2 billion. The Indian API manufacturing industry is expected to record exports of US$2.8 and US$12.75 billion and the global market will reach to US$46 and US$52.9 billion by 2010 and 2012 respectively.
The Indian API manufacturing industry is expected to grow at an average yearly growth rate of 19.3 per cent by 2010, according to PricewaterhouseCooper’s estimation. An important addition of ICSE India - E&Y/OPPI (Ernst & Young/Organisation of Pharmaceutical Producers of India) speak volumes of business growth for API and related industry. In their mid-2009 report, India’s outsourcing sector is growing at 43 per cent, with drug discovery and development segment growing at 65 per cent which is well over three times the global average. India is targeting to become one of the top five innovator countries by 2020.
Blue –India, Orange-Global
Industry analysts have commented that expertise in process chemistry-related drug development and the ability to make drugs at one-fourth the cost incurred in the US and Europe has made India as one of the most preferred destinations for drug manufacturing in the changing global pharmaceutical landscape. Armed with expertise on chemical processing and standard operation facilities, the industry, which is currently selling almost 90 per cent of its total ingredients production, is now on a venture to explore the markets in US, Europe and Japan.
China is a strong contender of India in the API business. Day after day, the increase in the number of regulatory approvals from US and European Union, to the Indian manufacturing plants, also shows the shift of focus of Indian API manufacturers from the semi-regulated to the regulated markets. A study predicts the shift in focus of Indian companies to the regulated markets by 2012, with almost 65 per cent of the exports to the regulated market whereas the share of exports to semi - regulated market will come down from the current 54 per cent to 35 per cent. The growth of generics in the regulated market, considering the expiry of a large number of patented products in the coming five years, will be an attraction for the Indian exporters to these countries.
The increased concern of pharmaceutical companies, regulatory authorities and the customers in these markets about the quality standards of bulk drugs, intermediates and excipients used in the drugs is giving an edge to the Indian API players in exports to these regions. India is acquiring various strategies for cost management, new molecule development, improvement of manufacturing processes, to overcome the new set of challenges and enter strictly regulated markets. Bulk drug majors, including Dr Reddy's Laboratories, Ranbaxy Laboratories Ltd, Aurobindo Pharma, Cadila Healthcare Ltd, Cadila Pharmaceuticals Ltd, Sun Pharmaceuticals Industries Ltd, Cipla Ltd, Dishman Pharmaceuticals & Chemicals Ltd, Divi's Laboratories Ltd, Hikal Ltd, Orchid Chemicals & Pharmaceuticals Ltd and Torrent Pharmaceuticals Ltd are keen on leveraging the potential of the global bulk drug industry.
The related challenges in DMF/COS (drug master file/certificate of suitability) filing, qualification of intermediates, independent audits of the API facilities and handling manufacturing related issues need high-end delivery and expertise to value add the customer requirements. ICH (International Conference on Harmonization) has been amending and updating the related guidelines in the API sector which is draft guideline: ICH Q11 on Development and Manufacture of Drug Substances for chemical entities and biotechnological/biological entities. Thus growth is happening in outsourcing business ventures in the various sectors of regulatory filings, manufacturing, technology, engineering and other services to achieve high quality API for medicines and healthcare for all.
The United States Food and Drugs Administration has set up a full-fledged office in New Delhi recently. The US accounts for over 19 per cent of India's pharmaceutical exports today. EMEA recent visit and prospective approach speaks on their vision for India which is remarkable. Similar positive waves are followed by the other sectors in the pharmaceutical arena.
With the pharmaceutical markets in India continuing to grow at double-digit rates and traditional pharmaceutical markets such as the US, Japan and Western Europe remaining stagnant,it is no surprise that many active ingredient manufacturers have set their eyes on India. When evaluating opportunities in new markets, API manufacturers have to analyse both the supply and demand for particular active ingredients in the target country and be able to navigate the regulatory landscape. Since India is the hotspot of API manufacturing, any producer looking to sell APIs here must be prepared to compete against local manufacturers, cheaper imports from other emerging markets and regulated market players that have set up a manufacturing presence in the country.
Although pharma business was not affected as much by the impact of recession in comparison to others, the industry is showing significant growth signs with all activities relating to drug development, manufacturing, technology transfer and audits. Following the current trends, CPhI events are witnessing growth in the number of API business players that are multiplying each year from India. These companies are gearing up to meet the global challenges productively with their strengths and capabilities.
-The authors are with PharmaLeaf India Pvt Ltd an international regulatory
consultancy based in Bangalore