The active pharmaceutical ingredient (API)sector is now increasingly focusing on the development of High Potency Active Pharmaceutical Ingredient (HPAPI). There has been a paradigm shift in the use of innovative drugs to that of low-cost API drugs after the economic recession which has positively impacted the overall growth of the API market.
In order to keep abreast with these changes, API manufacturers are adopting novel technologies to reduce the processing time in order to yield more production. The HPAPI compounds are highly effective due to the targeted therapy. Hence, its application for cancers is a major driver. The market of North America is the largest and accounts for the major share followed by Europe. But Asia is growing at a higher CAGR as compared to North America & Europe.
Indian pharma industry sees this as an opportunity as the country is known for its economical pricing and expertise supported by the large plants which have global regulatory compliance, said industry observers.
New growth phase
Globally, the API industry is entering a new growth phase. From new regulations to patent expiry and Para IV focus, the API industry is experiencing unprecedented growth due to the escalation in market dynamics of competition and consolidation.
API companies will need to focus on manufacturing efficiencies and building partnerships with customers in order to succeed, according to a section of industry manufacturers across all markets of US, EU, Japan and the Asia-Pacific region.
Indian API companies like Aurobindo, Granules, Lupin, Divi Labs, Mankind Pharma, Shilpa Medicare, Hetero, Malladi, Dr. Reddy’s, Micro Labs, Bal Pharma, Biocon among others are realizing and exploiting the potential of the US and the European markets with a slew of products.
Increasing API use
There is a noticeable escalation in the requirement for APIs. The pharma industry in India has considerable production prowess and is expected to play a major part in the international arena, said Anjan K Roy, managing director, RK Fine Chem.
Valued at US$ 120 billion, globally there are around 7, 000 APIs of which US share is 45 per cent. India has over 2,000 API manufacturing units producing nearly 1,500 APIs, which is estimated at US$ 9 billion. Out of this , nearly 50 per cent is for export. India has the opportunity to grow this business and increase its global market share. Indian pharma industry is the front runner in science sectors.
Strengths of Indian industry
The key strengths of the Indian industry are the sound knowledge of chemistry , access to competent and technologically sound work force, which has enabled it to gain a strong foothold in the global API market. In 2014-15, the export revenues that ensued from the pharmaceuticals is estimated at around US$12 billion and is seen to increase to around US$20 billion by 2020.
The big advantage for Indian API industry in the global arena is the cost competitiveness. In India the expertise is high based on the chemical acumen of its scientific talent. The contract manufacture and research services in India like Anthem Biosciences and Syngene, a Biocon subsidiary and Jubilant have made considerable progress compared to the Western countries, said Karnataka Drugs and Pharmaceutical Manufacturers Association.
“From a global perspective, the API capability of India cannot be ignored. We account for the highest number of USFDA facilities pegged at 171 and EMA approved units besides other global regulatory majors in Japan and Australia which enables it to take a big leap in terms of cashing in on opportunities. Even if the country’s volume of production is lower compared to China, the global recognition on quality and variety of API products creates an opportunity to either partner with global players for marketing the APIs. It could also garner its revenues from being a preferred supplier for global pharma big wigs,”noted GG Gurudatta, CEO, Estima Pharma. The government’s 'Make in India' programme is also working to simplify existing policies, remove hurdles and regulatory clearances which would be seen to make Indian API industry a global force in the international arena. Currently large API production comes out of the US, EU, Japan and Australia besides Korea and Malaysia and Vietnam, noted Gurudatta.
Further, there is also a big opportunity for Indian APIs to manufacture Angiotensin II receptor antagonists or sartans used in drugs for hypertension, diabetic nephropathy and congestive heart failure. Some of the APIs are osartan, candesartan, irbesartan, telmisartan, olmesartan, valsartan and eprosartan. India also has the expertise in dermatology and dental APIs. Therefore by 2020,the Indian API industry could compete with China head-on and be a preferred partner for global players in the space, said Roy.
Slew of new regulations
Since early 2013, there have been a slew of new regulations introduced : from the USFDA recent norms on Regulatory Classification of Pharmaceutical Co-Crystals to the EMA guidelines on exposure limits for production of varied medicinal products in shared facilities and the Central Drugs Standard Control Organisation (CDSCO) the guidance document for the issue of Written Confirmation (WC) certificate for active substances exported to the European Union (EU) for medicinal products for human use, in accordance with Article 46(2)(b) of EU Directives No. 2001/83/EC.
According to D&B Research, the Indian pharmaceutical industry is fragmented with more than 10,000 manufacturers in the organized and unorganized segments. While 77 per cent of these are engaged in production of formulations, the remaining 23 per cent are in the API space. Overall growth outlook for the Indian drugs and pharmaceutical industry appears positive.
API manufacturers are likely to benefit as market dynamics have undergone a major change. The patent expiry provides a significant opportunity for supply of APIs to manufacturers of generic drugs. There are also increased opportunities in outsourcing of bulk drugs by multinational pharmaceutical companies. These opportunities have led the Indian API industry to focus on core competencies and access to novel technologies, said the ICRA report.
“The role of Indian API manufacturers in the global pharmaceutical supply chain is gradually evolving with increasing presence in synthesis and manufacture of late stage intermediates and APIs. Traditionally, innovators have frequently opted to perform final stages of API synthesis in-house or partner with specialized European suppliers while outsourcing early stage intermediates to Indian manufacturers. However, in recent times, the reputed track record of Indian companies in supplying quality products coupled with complex synthesis capabilities has enabled increased participation in supply of late stage intermediates to innovator companies, ICRA report added.
According to Deloitte in its report on Life Sciences Outlook ‘ Optimism tempered by reality in a new normal’, the companies are altering their business models as they are increasingly sourcing APIs from low-cost locations globally. However, monitoring the quality of these APIs is difficult and thus, a cause for concern.
Tapping opportunities
Going by the slew of new regulations coming in the USFDA, European Union and MHRA, and the Drugs Control General of India also ensuring that APIs quality are maintained, Indian pharma is confident to take on the global markets with more vim and vigour, said members of the Karnataka Drugs & Pharmaceutical Manufacturers Association.
In order to tap the upcoming opportunities, the Indian API industry has also turned to environmentally friendly production processes. There are several efforts to go green, reduce carbon footprint and reduce electricity consumption and water. The companies have also measures in place to decrease hazardous waste. Research is on to improve the processes, bring down waste from API synthesis, going in for fewer chemical reactions to dispose-off solvents and look for efficient means to improve and save the environment.