Contract Pharma-The Neglected Sector
Unlike Generics and vaccines, Contract Development & Manufacturing Organisations (CDMO) sector has rarely captured limelight although being a potential in the Indian pharmaceutical sector. It could be the largest revenue earner by the next decade, even surpassing generic exports. The country should take a deeper look into understanding its operations and the essential role CDMOs play in bringing therapies in development to a reality.
CDMO operates in many sectors such along the value chain of drug discovery & development process (Please refer value chain chart). The two major divisions in CDMO are Clinical Research Organisations (CRO) involving all aspects of drug discovery & development and Contract Manufacturing Organisations (CMO), which manufactures Active Pharmaceutical Ingredients (API), the key therapeutic ingredient in a medicine and formulations such as tablets, capsules, syrups, injectables etc. India is amongst the few countries in the world, which can play a major role in the entire value-chain.
*Contract Research is further outsourced for medical writing, submission dossiers, patient recruitment & biostatistics etc.
@Small volumes for drug development and large volumes for commercial production
In Part 1, we will look at global opportunities for Indian pharmaceutical industry towards drug discovery in the CRO space and in Part 2, drug manufacturing in the CMO space.
Covid-19 has shown the technological lead of Indian companies in vaccine field where even advanced countries such as Japan, South Korea and Taiwan have not been successful. CDMOs seen as a dark horse can play a vital role in vaulting India among global biopharmaceuticals leaders.
Growth in CDMO, besides bringing much needed revenue has several additional advantages.
Cutting Novel Drug Discovery & Development Cost
A 2014 study by Tufts Center for the Study of Drug Development (CSDD) provided an estimate of the cost of developing and gaining marketing approval for a new prescription drug i.e. $2.9 billion. Aa new study conducted by the non-profit Institute for Safe Medication Practices (ISMP) analysed cost data from 101 new drugs approved from 2015 to 2017. For example, in the Tufts study, researchers estimated the average cost of a Phase III trial to be $255 million while the ISMP study estimated it to be $20 million. Even if we include the cost of dropped candidates, the total cost is much lower than the universally quoted figure. India is well suited to attract global firms for pre-clinical activities to Phase III trials.
A major development aiding the lower cost of novel drugs, is the deployment of information technology tools. Indian I.T. landscape is highly developed comparatively to many other countries. AI supported by Big Data and Analytics, has made it possible for the use of automated algorithms to carry out tasks in drug discovery and development that once depended on scientists.
Clinical Trials
One major area that started with great expectations, but has operated much below potential is Clinical Trials (CT) where outsourcing in increasing. The global CT market at $39 billion in 2020 rising to $112 billion by 2030. India’s CT market estimated around $1.7 billion in 2017 moved at 8.7% to $2 billion in 2020. Thus, India’s share is a low 5% of the global revenue.
India accounts for nearly 16.0% of worldwide population with nearly 20% of the disease burden across the globe, yet less than around 1.4% of total global clinical trials are conducted here. With a suitable regulatory support, this sector can also be worth $10-12 billion by 2030 at 10% of the global market, though even 15% is possible. However, to reach this target, the industry must scaleup as well as put stringent quality processes in patient management and data collection.
Biogenerics
The low cost of research and development has promoted the increased development of biologics in the country. For instance, while the development of a biosimilar takes approximately eight years in the European Union, the development of a similar biologic takes only three to five years in India. The cost incurred in developing a biosimilar in the European Union or United States is estimated between $100 and $200 million, while in India it costs $10 to $20 million. Most Indian companies that are engaged in biosimilar manufacturing do not attempt to enter the U.S. market due to the litigation and regulatory costs.
Therefore, for Indian biogenerics companies, an attractive route should be to collaborate with larger global companies to jointly develop the products and transfer manufacturing to Indian collaborator similar to Mylan/Biocon partnership.
Repurposing Existing Drugs
Drug repurposing (also known as drug repositioning) identifies new therapeutic use(s) for old/existing/available drugs as an effective strategy in discovering or drug development. CDMOs are well placed to seize this opportunity and can tie up with innovative drug companies. According to MarketWatch, the global Drug Repurposing market size is projected to reach USD 30 billion by 2026, from USD 25.3 billion in 2020, at a CAGR of 2.9% during 2021-2026. Indian companies should attempt to seize at least 10% of this opportunity, which will bring in $2-2.5 billion revenue.
Cost is not the limiting factor for the CDMO shift. Availability of talent in persuading the drug companies to shift their CDMO activities to India can be important. The entire global CDMO sector being a knowledge intensive industry is in shortage of skilled personnel with any intervention paying dividends both within the country & overseas.
The future is sparkling for the Indian CRO Industry but in a fast-changing business environment, it must study global trends, make sense of distant signals and evolve in a proactive manner. There is little long-term future without strong foundation in science & technology. With significant investment in R&D, Indian CDMO industry can stay globally competitive and make an invaluable contribution to the country.
