The global pharmaceutical industry is in the path of a major revolution. The ever-increasing research and development costs and the patent regulation of blockbuster drugs have forced the companies to turn to alternatives to find a safe way to keep their bottom line intact. The search has led the pharmaceutical companies to the concept of outsourcing of research and manufacturing activities, pushing up the idea of contract research and manufacturing services or CRAMS.

With CRAMS poised to boost the pharma and biotech industries, Indian companies are busy expanding their facilities to form these services as part of their segment. Given the present status, Indian pharmaceutical companies are all set to capture 10 per cent of the global CRAMS market of US$ 168 billion by 2009. Though CRAMS segment is expected to grow by 16 per cent in the coming years, the growth will be hampered if certain gray areas are not addressed.

Talking to Chronicle Pharmabiz, Venkat Jasti, chairman and managing director of Suven Life Sciences Ltd. said, "the internal competition and lack of governmental support is causing unexpected changes in the industry. If survey reports are taken into account, the pharmaceutical industry is getting plenty of research-oriented projects. But the real picture is just opposite. The better aspect of the CRAMS segment is that it does not face manpower crisis as is the case with other sectors, including pharma and biotech."

Though the presence of big players in CRAMS is considered a good sign and essential for making it competitive, the value addition to new chemical entities (NCE) is not being realized in pharmaceutical industry, said Jasti. Apart from developing 'me-too' drugs, there is no new development in the industry, he pointed out.

As per Jasti, the CRAMS segment needs external support to flourish. As of now, there is not enough support from the government to help the pharma companies engaged in the CRAMS to work on additional components with change in product base. Often, what acts as a stumbling block in attaining the government support is the objections from the pollution control board. And hence, there is no point in having new facilities every time, he added.

"It is good that we in India offer low cost services, be it development of the molecule, skilled manpower or raw materials. But if we want to be global players, there should be cut in tax and duty. This has not been done as far as the contract research is concerned. It is high time that the government had taken 'out of the box' initiatives, helping the country to make it big in the CRAMS. The industry is strong enough to sustain any changes but the issue rests with policy makers," said Jasti.

Considering the present situation, not only CRAMS but also the pharma industry is facing roadblocks with regard to incentives, infrastructure, and other aspects. As per Jasti, either the central or the state government has so far not done anything to push up the small and mid cap pharmaceutical companies in the country.