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Neeraj Vashisht
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Indian API industry is one of the greatest success stories never fully recounted. It ballooned from a small and irrelevant niche aspirant to a sizeable player with significant potential to achieve global dominance, all within a few years!
Consider this:
- India’s supply to the US API market increased at a rate of 44 per cent over 2008-2012. It is now the second largest supplier to the US. Looking back, in 1999, India had only a handful of Abbreviated New Drug Applications approved by the US FDA
- India accounts for nearly one-fifth of the API supply to western Europe
- While China is one of the largest API players in the world, India has double the number of established manufacturers accredited to supply to regulated markets.
Globally, generic APIs will outpace innovator APIs; with Asia Pacific set to outpace established western markets. However, growth rate of APIs have slowed down from the heady days. Within this milieu, India is in a very unique position. Our success in the regulated markets sets us well for long-term growth; but we need to scale this success to the next level.
Here are the three things the Indian industry should consider doing:
Strengthen the core: FDA warnings have gone up significantly over the past four years. With multifold growth in volumes, it should not be entirely unexpected. However, with stiff and growing competition, any slippages can cost us dearly especially since we rely heavily on exports to the US market. Upon a deeper analysis, most of the issues with Indian companies are not with the quality of the products per se but on the transparency of practices, strength of processes and adherence to controls (which is what cGMP focuses on). Addressing these issues will be vital to support the growing scale of the industry.
Build newer markets: Many markets, some right in our backyard are beginning to show significant growth potential. These include countries in the Asia Pacific, Commonwealth of States (CIS), the Middle East etc. that are likely to show double digit growth. With our geographic proximity and proven capabilities, Indian API players are poised for interesting growth options in these markets. Besides, this will help diversify our geographic portfolio and reduce risks especially as western markets continue to face significant downward cost pressures.
Expand into newer areas: Last decade’s experience in manufacturing APIs for small molecules has helped companies understand how sophisticated customers buy. Indian companies must now significantly ramp up their efforts to scale up the value chain using value added offerings, (contract research and manufacturing, novel drug delivery systems, new chemical entities related offerings etc.) and venturing into newer spaces like biosimilars etc to catch the next wave of opportunity. This has been taking place in pockets but a lot more needs to be accomplished.
In summary, the Indian API industry is at an important cross road. While it has enjoyed significant success over the past decade, the ground it stands on is continuously shifting. On one hand, the industry must continue to strengthen its core by investing in quality and processes and on the other take calculated risks to maximise its global growth opportunity. Indian API players have shown remarkable resilience and entrepreneurship in achieving outstanding results. This must boldly continue to take India to its next phase of evolution in the API space.
– Neeraj Vashisht, Senior Principal, LifeSciences Practice, IMS Consulting Group