Pharma Regulatory & licensing ServiceBusiness.A.Vikram Sathish
Indian companies have recently focused a lot on R&D in the pharmaceutical sector. Many companies now spend 8% or more of revenues on research.
Many pharma companies are now actively targeting international companies for contract research and manufacturing (CRAM) deals.
Medicinal chemistry, custom synthesis, and clinical studies are some areas in which Indian firms are pitching and winning new business.
The global pharmaceutical outsourcing market was worth USD57.2 billion in 2007. It is expected to grow at a CAGR of 10% to reach USD76 billion by 2010. Global market for Contract Research and Manufacturing Services (CRAMS) in 2007 is USD55.48 bn. Out of the total global CRAMS market, Contract research wasUSD16.58 bn,growing at a CAGR of 13.8% and Contract manufacturing was USD38.89 bn accounting for themajor share (approximately 68%) of the total global pharmaceutical outsourcing market.
Indian pharma outsourcing market was valued at USD1.27m in 2007 and is expected to reach USD3.33 bn by 2010, growing at a CAGR of 37.6%. The Indian CRAMS market stood at USD1.21 bn in 2007, and is estimated to reach USD3.16 bn by 2010.
SCOPEPharmaceutical companies increasingly outsource to third parties to save money, speed up processes and get products into the market quicker.Outsourcing allows companies to focus on their core competency areas and expedite the entire process.In Asia pacific, large biopharmaceutical companies outsource to their local and regional partners. CRO's (Contract Research Organizations) move up the value chain with the desire to serve only few global customers rather than diversify in different areas. Additionally, they are slowly converting into SMO's (Site Management Organizations), where protocol development and monitoring takes place in addition to R&D.
APIsDiscoveryChemistryFormulationsAdvancedIntermediatesProcessR&DOutsourcing Business SpaceRange of ServicesFrom Clinical quantities to Commercial scale
Business SpaceDiscovery ChemistryProcess R& DPipeline IntermediatesMatured IntermediatesBIG PHARMAPipeline API’sMatured API’sDosage DevelopmentCommercial Drug ProductDiscovery ChemistryProcess R& DEMERGING PHARMAPipeline IntermediatesMatured IntermediatesPipeline API’sDosage DevelopmentFINE CHEMICALCOMPANIESPipeline & Matured Intermediates
Global Pharmaceutical Outsourcing Opportunity Estimated Potential Market:Packaging/Assembly Dosage FormProduc-tionDosage FormDevelop-mentDrug SubstanceProduc-tionProcessDevelop-mentClinicalDevelop-ment Pre- clinicalDevelop-mentDiscoveryResearchPharmaceutical R&DDrug SubstanceSupplyFormulated Drug Supply30-35~5060-80(in $ bn)Current share of outsourcing in defined Contract R&D/Manufacturing space is around ~$35 bnSource: Dow Report, AD Little, Cardinal Health
Changing Face of Industry Declining R&D output & high costs continue to pose challenges to profitability
 Blockbuster drug launches expected to drop from 14 in ’03 to 4 in ’08
 Drug Product Withdrawls (Vioxx) and safety concerns (Crestor)
 By ’08 patent expirations will account for $ 72 bn in current salesLeading toGlobal OutsourcingDRIVERSCostIncrease ProductivitySpeed up New product       DevelopmentD.	Expand skills & capabilitiesSource: AT Kearney Report
Changing Face of IndustryDeclining R&D output & high costs continue to pose challenges to profitability
Blockbuster drug launches expected to drop from 14 in ’03 to 4 in ’08
Drug Product Withdrawls (Vioxx) and safety concerns (Crestor)
By ’08 patent expirations will account for $ 72 bn in current salesLeading toGlobal OutsourcingDRIVERSCostIncrease ProductivitySpeed up New product       DevelopmentD.	Expand skills & capabilitiesSource: AT Kearney Report
Facts & Figures - INDIAHighest number of FDA approved plants outside USALargely English speaking workforceIT capital of the worldDemocracy of 1 billionTRIP compliantUK based legal systemStructured and reasonably transparent financial markets & banking systemDependent on oil for energyWell entrenched entrepreneurial culture & developed private sector Superior education levelInfra-structure in need of developmentLargest market-share in generic API productionExport & Western orientedEconomic growth in terms of GDP just slightly behind China
Changed IP Scenario in IndiaGlobal standards followed on IPM
CDAs, MoUs, Non-Use Agreements, etc – routinely implemented
Work ethics & “Need-to-know” work practices
Employee Contracts & Employee retention mechanisms
Legal provisions & remedies availableCheap Source of intermediatesQualified API sourceAnd Efficient ProcessR&D ResourceIndia is now being looked at as a reliable sourceacross the value chain in pharmaceutical industry
India Advantage / DisadvantageAdvantagesCostFlexibilitySpeed  Language
  Chemistry, Engineering, Regulatory & QA experience, Dosage expertise
  Manufacturing InfrastructureDisadvantages Capability in Niche Segments (Ex. Controlled Substances)
 Communication
 Emotional blocks (Ex. Compliance, Generic Challenges etc)Medicinal ChemistryCMC DevelopmentFormulation & DevelopmentOperational Issues & FocusTrack record
Expertise
QESH Compliance
Capacity
Commercial scale
Scope for scale-up
Analytical
Sourcing
Lead times
Stick to timing
cGMP
IP Security
Skill
Technologies
CommunicationCauses for negative experiencesProvider specific issues:Environmental issues; license to operate
Asset reliability
Quality issues
“Yes” means, I will do whatever I can, “No” is culturally impolite
Communication Issues Key Elements for Pharma BusinessPRODUCT INDUSTRYSERVICE INDUSTRYDIFFERENTIATORS Innovation        First to Market

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