Bye, Bye IT. Welcome home the pharmaceutical Outsourcing!
Bye, Bye IT. Welcome home the pharmaceutical Outsourcing! Credit: Business Today

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Bye, Bye IT. Welcome home the pharmaceutical Outsourcing!

Oct 03, 2018

India loves making medicine. And medicine loves India. Moreover, there’s something promising and positive that’s now happening in the field of manufacturing medical drugs in India!

It’s this astonishing and fast growth in the pharmaceutical contract manufacturing! Why is there such an enormous growth? Because of these two reasons below:

  • Some expiring drug patents that once upon a time restricted many drug manufacturing companies from making such drugs in India
  • Our country India is famously known to have low-cost manufacturing centres

But talking of contract manufacturing in India, what is its future? The contract manufacturing space in India is expected to grow by 17–18 % on an annual growth rate as efficiency in manufacturing and maturity of business models would lead to containment of cost of manufacturing to a great extent.

Wonderful things have happened in the recent past few decades. India has made great progress because it’s now grown from just being a pharmaceutical production nation to a contract manufacturing nation! And do you know the growth at which this pharma contract manufacturing is growing in general? At an impressive 20%!

So what does this mean? This growth means a brilliant opportunity for small and medium enterprises! And this is achievable because the prevailing market is now estimated at 50% of the domestic production. This is approximately US$ 5.3 billion! As for the multinational companies, they have got a good 20–25% stake in the pharmaceutical market in the domestic arena.

That’s not all. Did you know that India has a better advantage than seemingly advanced countries like China, Vietnam and Ireland? That’s the truth! And this is because of resources. And this may also encompass manpower, work force that is technically knowledgeable and because the premises for production are ones that are WHO-GMP approved.

This new concept of contract manufacturing has been speedily adopted in India. And this has been due to the coming of multinational pharmaceutical organisations whose growing presence in India is without doubt noticeable.

Why this new concept? In order to embrace all the services such as:

  • Basic manufacturing of medicinal products
  • Formulation development
  • Stability studies
  • And various stages of clinical trials

There’s another step that has become an incentive for many pharmaceutical organisations to direct all the focus on India since the cost savings could be astronomical. The scale-up of drug syntheses and late clinical trial studies are proving to be money-spinning protocols in this sphere.

A Change in Patented Drugs!

When medical drugs are just manufactured and are new on the market, they can be quite expensive to manufacture due to patent issues! But could you believe it, it’s now estimated that some patented drugs whose huge worth is $ 85 billion in potential annual sales in the USA will no longer be on the list of patent drugs between 2014–2020!

There’s going to be something good that’ll be driving this pharma business in India. And that means that there will be good competition in prices and manufacturing of generic drugs in the most cost-effective way.

Indeed, this good news for India! Why? Because our country is the world’s best-known low-cost manufacturing centres. It has the biggest number of U.S. Food and Drug Administration (USFDA) approved manufacturing plants outside the US.

What about the Indian government? It’s not sitting back. It’s also planning to throw big pieces of firewood into the fire to keep the pharma business burning by pushing for upgrading of Schedule M facilities to WHO-GMP compliant units with the assistance of soft loans.

With what outcome? It’d lead to another 1000 units to become certified WHO-GMP compliant. This would give additional support to the manufacturing processes of medicine.

The words of the Director General of Pharmexcil, Dr P V Appaji, are so inspiring and reassuring. He’s revealed that some multinational companies in India have now ceased the work of manufacturing some of their cherished medical products. And what have they embarked on now? On outsourcing Indian manufacturers

There’s happy news for aspiring entrepreneurs in the field of manufacturing drugs, too. Some medical drugs that are already brandy leaders are now being outsourced to many drug companies in India.

Furthermore, there’s a medical wind of change blowing through Europe. Things are no longer the same. Some ageing drug plants in Europe might close up and this would open up incredible opportunities for some drugs companies in India when it comes to contract manufacturing. Why?

Because some companies in Europe are now thinking of moving their plants to cost-efficient areas such as India! And again, they thinking of outsourcing to manufacturers in India. Isn’t this really amazing?

They say the higher the demand, the more profit you make in any business. But sadly, some innovative products that were introduced by big guys on the world market in the last 5 years or more are not in higher demand when compared to their previous demand. And they don’t even have large market value.

So what are they doing about it? To get the best out of their popular brands, even these big guys are planning to outsource their manufacturing of drugs to more cost-efficient places such as India but still maintain the quality and brand image. And this will open up a fresh opportunity of manufacturing opportunity for drugs companies in India!

And India is now making a warm invitation to pharma companies in Japan to move to India with their ownership in their entirety or partially with some Indian companies. They are responding with avid interest.

Indeed, there’s astonishing and fast growth in the manufacturing growth in India! Do you love manufacturing medical drugs? Then try to enter the pharma business!