Maturation of India’s Pharma-Outsourcing Industry

India’s outsourcing sector is growing at 43 per cent, according to a new report that predicts the country will take a bigger share of the global market as concerns about operating there diminish.

The predictions are made by Ernst & Young and the Organisation of Pharmaceutical Producers of India (Oppi) in a report that focuses on the maturation of the country’s outsourcing sector.

Outsourcing is now a “strategic imperative”, according to the report, and this creates a big opportunity for India, which is well positioned to capture a proportion of future growth.

Respondents in the report ranked India highest among its outsourcing peers for cost efficiency attractiveness, with all those questioned rating it as “above average”.

Furthermore, India’s technical capabilities were highly regarded by respondents. This is underpinned by the country’s expertise in active pharmaceutical ingredients (APIs), formulation and the end-to-end services it can provide.

The report covers these end-to-end services under the term contract research and manufacturing services (CRAMS) and then breaks this down into two segments. These cover Phase IIb and onwards manufacturing and drug discovery and development.

Overall CRAMS in India has a compound annual growth rate (CAGR) of 51 per cent, according to the report, and this will result in it generating revenues of $3.8bn (€2.7bn) and capturing 5.5 per cent of the market by 2010.

Growth in the manufacturing sector is underpinned by big pharma’s closure of underutilised facilities, the trend for emerging companies not to build in-house capacity and the rise of biologics, which require more infrastructure investment.

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