CPhI India Report identifies two-tier manufacturing market and predicts increased acquisitions

10 Aug 2017

CDSCO certification has improved international repute of India, but domestic companies call for urgent Government support to invest in API facilities.

CPhI releases the findings the 2017 India Pharma Market Report, which identified a two-tier manufacturing market and forecast increased acquisitions by Indian companies, along with a notable improvement in the international reputation of Indian made pharmaceuticals. But perhaps most dramatically, a large majority of domestic companies called for urgent Government support to invest in API sites.

CPhI India Report identifies two-tier manufacturing market and predicts increased acquisitions

The report, which consolidated opinions from 500 domestic and international companies, identified four main areas in which Indian pharma companies are investing – with 50% raising funds this year for ‘commercial scale and scale-up facilities’; around one third for ‘continuous processing’; and just over 20% each in both ‘biologics’ and ‘aseptic/sterile’. Over the next 3 years, however, the number of companies planning to invest in biomanufacturing facilities rises to one third. It’s notable that the 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 1-3 years, 36% of Indian pharma companies are planning acquisitions; 20% are looking at facilities in the US and Europe, with 7% exploring options in the rest of the world. Domestic acquisitions also point towards a scramble amongst many SMEs for greater size and scale, with some 25% also looking at facilities within India itself.

These findings are announced ahead of CPhI India (27-30 November 2017), which is forecast to reach a 40,000 attendees, with overseas interest in the country growing rapidly. The report also highlighted that the international reputation of the country on ‘data integrity’ has also improved massively; 96% agree that the CDSCO certification programmes and initiatives are helping to increase compliance. Even more impressive is the fact that 52% of international respondents believed the CDSCO is moving toward comparability with the regulatory standards of the EMA and FDA.

A major concern highlighted amongst domestic companies (86%) was an over reliance on Chinese ingredients within the finished formulations sector. In fact, the majority of domestic companies (81%) 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 amongst the growth drivers reported are strong domestic sales in the next 2-3 years, generic APIs exports, as well as finished formulation for developed markets. Finally, 41% of international respondents believed that more biologic alliances – similar to the Mylan-Bocon partnership – may develop between India and the West in the future, with 30% believing these will proliferate in the next 3-5 years.

One interesting perspective on the India finished dosage sector – well known as the world’s leading exporter – is the identification of a two-tier system, with business models targeting different types of foreign market. The first type is targeting predominately the Western pharma economies, consisting mainly of the United States and Europe. In this market, India is a prime provider of complex generics, branded drugs/OTC, and biosimilars due to its cost-efficient and high quality products. Larger pharma companies are now looking beyond these two Western markets and expanding into Japan, as generic use is forecast to expand rapidly – after many years of largely on-patent drugs – yielding greater profit opportunities. On the other hand, India’s smaller and medium sized pharma companies (type 2) have focused on developing countries as their export market; in particular, on high-volume, low-margin generic products. Consolidation amongst these providers is highly likely as they try and progress-up the value chain, and move into formulations with greater margins – 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 the biosimilars and biologic sector is now the hotbed of national innovation, and will see well above-market growth in India. With more biologics coming off-patent in the near future, there is a growing opportunity for pharma companies to make increased profits via biosimilars with interchangeable standards.

Rutger Oudejans, Brand Director, Pharma - UBM EMEA, said: “CPhI India has seen dramatic changes in the last 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. It is an extremely dynamic market with standards and its global reputation catching-up with the on-the-ground realities. This year we anticipate an enormous 40,000 attendees and we expect the number of multinationals and new innovations emerging out of the country to accelerate. Frankly, we were taken aback by the overwhelming positivity of our report’s findings, with only supply chain ingredient concerns identified as a potential drag on growth.”

Read More

Related news

Third Sartorius Research Xchange Forum 2019 focuses on CAR-T cell therapy

Third Sartorius Research Xchange Forum 2019 focuses on CAR-T cell therapy

13 Mar 2019

Event for experts from academia and industry, including talks, live demo sessions, and panel discussion.

Read more 
Overcoming lyophilization challenges at Interphex 2019

Overcoming lyophilization challenges at Interphex 2019

10 Mar 2019

Line of Sight approach to freeze-drying enables organizations to bring pharmaceutical products safely and quickly to market.

Read more 
'Tamper-evident' benefits are evident

'Tamper-evident' benefits are evident

28 Feb 2019

2019 will mark Uniplast's debut at this year's edition of CPhI Worlwide in Frankfurt, where it will showcase its expertise in plastic packaging.

Read more 
Japan solid dose market predicted to bloom in 2019

Japan solid dose market predicted to bloom in 2019

21 Feb 2019

Executives predict Japan to be the second fastest growing mature market for solid dose drugs in 2019, and the second fastest overall country for biologicals growth.

Read more 
Pharma in South East Asia booming as CPhI opens event for the first time in Thailand

Pharma in South East Asia booming as CPhI opens event for the first time in Thailand

27 Feb 2019

Healthcare and pharmaceutical reforms, designed to increase access to high-value medicines, driving growth.

Read more 
Pharmapack Europe 2019 Award Winners

Pharmapack Europe 2019 Award Winners

7 Feb 2019

Awards showcased a wide range of industry-changing discoveries in drug delivery, packaging and automation.

Read more 
Pharmapack report predicts diversification of innovation leading to a rise in licensing and partnering

Pharmapack report predicts diversification of innovation leading to a rise in licensing and partnering

27 Jan 2019

New report highlights Germany, France and Switzerland as tier-one nations for ‘drug delivery innovation’, and warns the challenge will be to scale-up and approve promising prototypes.

Read more 
Fiera Milano to host CPhI Worldwide 2020

Fiera Milano to host CPhI Worldwide 2020

20 Jan 2019

The exhibition district will see the world's largest pharma industry event.

Read more 
BASF’s new active ingredients target skin conditions’ root causes

BASF’s new active ingredients target skin conditions’ root causes

15 Jan 2019

New active ingredients coming from the research of BASF’s innovation platforms on epigenetics, microbiome and extraction.

Read more 
Future-oriented packaging concepts from Sanner

Future-oriented packaging concepts from Sanner

11 Dec 2018

Company will showcase a range of packaging solutions, from desiccant and customized packaging to smart packaging solutions, at Pharmapack.

Read more