CPhI India Report Finds Two-Tier Manufacturing Market, Predicts Increased Acquisitions

On August 10, 2017, CPhI released the findings of the 2017 India Pharma Market Report, which identified a two-tier manufacturing market and forecasted increased acquisitions by Indian companies, along with a significant improvement in the international reputation of Indian-made pharmaceuticals. The report, which consists of opinions from 500 domestic and international companies, identified four main areas Indian pharma companies are investing in-with 50% raising funds this year for commercial scale and scale-up facilities, around one third for continuous processing, and a little more than 20% each in biologics and aseptic/sterile.

Over the next three years, however, the number of companies planning to invest in biomanufacturing facilities will rise to one third, according to the report. It’s significant that more expensive facilities and capabilities needed for continuous processing and biomanufacturing are being added to India’s traditional base of commercial-scale, finished-product facilities. 

During the next one to three years, 36% of Indian pharma companies are planning acquisitions, with 20% looking at facilities in the United States and Europe and 7% exploring options in the rest of the world. Domestic acquisitions also point toward a scramble among many small and medium enterprises (SMEs) for greater size and scale, with 25% also looking at facilities within India.

These findings were announced ahead of CPhI India, which is taking place Nov. 27–30, 2017 and is expected to reach 40,000 attendees. The report also highlighted that the international reputation of the country on data integrity has also improved massively; 96% agree that the Central Drugs Standard Control Organization (CDSCO) certification programs and initiatives are helping increase compliance. Fifty-two percent of international respondents believed the CDSCO is moving toward comparability with the regulatory standards of the European Medicines Agency and the US Food and Drug Administration.

One concern stressed by 86% of domestic companies was an overreliance on Chinese ingredients within the finished formulations sector. Additionally, 81% of domestic companies believe that the Indian government needs to ‘urgently invest in domestic API facilities and provide tax-breaks and incentives to secure the Indian generics industry’ and prevent losses in market share.

Chief among the growth drivers reported are strong domestic sales in the next two to three years, generic APIs exports, and finished formulation for developed markets. Forty-one percent of international respondents believed that more biologic alliances may develop between India and the West in the future, with 30% believing these will proliferate in the next three to five years. 

A further insight into the India finished dosage sector is the identification of a two-tier system, with business models targeting different types of foreign markets. The first type is targeting predominately the Western pharma economies, consisting mainly of the US and Europe. Larger pharma companies are now looking beyond these two Western markets and expanding into Japan, as generic-drug use is forecast to expand rapidly-after many years of largely on-patent drugs-yielding greater profit opportunities. Additionally, India’s smaller and medium sized pharma companies (type 2) have focused on developing countries as their export market on high-volume, low-margin generic products. Consolidation among these providers is highly likely as they try to progress up the value chain and move into formulations with greater margins. Such companies also require a certain size and financial flexibility to invest in the newer types of products coming into the market.

Finally, the report argued that the biosimilars and biologic sector leads national innovation and will see well above-market growth in India. With more biologics coming off patent soon, there is a growing opportunity for pharma companies to make increased profits via biosimilars with interchangeable standards.

“CPhI India has seen dramatic changes in the past couple of years as increasingly all of world pharma is attending and domestic companies are investing in new types of manufacturing equipment and even biologics,” said Rutger Oudejans, brand director for pharm for UBM, EMEA.

Source: CPhI