The Indian bulk drug industry has gone through several developmental phases in the past five decades and has now emerged as a major supplier of active pharmaceutical ingredients (APIs) to the global markets.

The industry provides more than 400 APIs, meeting about 90 per cent of the domestic requirement. The Indian market is estimated to be about US$ 6.4 billion and is expected to grow up to US$ 25 billion by 2010, as per Bulk Drug Manufacturers Association (BDMA).

Indian bulk drug industry has about 600 manufacturing units and most of them are in small-scale sector. The country now exports to both regulated and non-regulated markets besides meeting the domestic requirements.

Going forward however, API export numbers would increasingly get merged into formulations numbers with the most players investing in backward integration for cost control and some large API companies (Aurobindo Pharma, Matrix Laboratories, and Shasun Chemicals, for instance) looking at formulations manufacturing for greater value addition, according to ICRA.

With competition intensifying, developing a profitable product portfolio of APIs for the regulated markets is increasingly becoming a challenge, requiring balancing of several factors. In certain segments, competition from low cost destinations like China is a significant threat.

Early entry and development of non-infringing processes for products with complex patents hold the key to developing a profitable API product pipeline. Pipeline and product concentration remain the key vulnerable areas for most API manufacturers, as per ICRA.

The heightened merger and acquisition activity in the generics industry would continue to sustain momentum with several global majors viewing India as a key manufacturing destination.

According to Pharmexcil, some of the major bulk drugs exported from India during 2003-04 include menthol (US$ 9.23 mn), cefadroxil (US$ 4.20 mn), cephalexin & ITS Salts (US$ 2.27 mn), sulphamethoxazole (US$ 2.02 mn), penicillin(US$1.95mn), other antibiotics (US$ 1.91 mn), tinidazole (US$1.05 mn), ethambutol (US$ 0.64 mn), timolol maleate (US$ 0.57 mn), niacinamide (US$ 0.49 mn) and amoxycilline & ITS Salts (US$ 0.49 mn).