India has long been an important producer of small-molecule active pharmaceutical ingredients (APIs) for Western pharmaceutical
companies, particularly in the generics sector. In fact, India currently accounts for approximately 8% of all global pharmaceutical
production, and India's contract manufacturing market is growing more than three times the rate of the global contract market,
according to a new survey conducted jointly by the Organization of Pharmaceutical Producers of India and Ernst & Young analysts.1
Karen Politis Virk
Now, as the biopharmaceutical sector continues to grow, many wonder whether India can take a similar role in the biologics
arena. Key questions, however, surround India's regulatory oversight, intellectual property protection, and compliance with
current good manufacturing practices (cGMPs) (see box). Furthermore, recent high-profile problems with India's small-molecule
manufacturing, such as the US Food and Drug Administration's September 2008 ban on imports from two Ranbaxy sites, because
of consistent failure to comply with cGMPs, heighten concerns about quality.
Ongoing Concerns about Offshoring to India
Yet the increasing importance of biologics makes the eventual offshoring of biologics manufacturing to India seem a likely
path. Biologics are expected to account for almost 50% of all approved new pharmaceuticals by 2010.2 Yet biologics also have tended to be very costly, and it is expected that biosimilars will become increasingly important
in the West, as Europe's biosimilars market grows and especially once legislation is passed to create a regulatory pathway
for biosimilars in the US. The biosimilars market is likely to offer India the greatest opportunity for manufacturing biologics
for the West.
COLLABORATION BETWEEN WESTERN AND INDIAN COMPANIES
One way that some Western companies are seeking to take advantage of the cost advantages of offshoring to India while reducing
risk is through collaborations.
For example, the Swiss-based contract manufacturing organization (CMO) Lonza, has recently announced plans to invest in two
major projects in the Genome Valley outside of Hyderabad—India's first state-of-the-art biotech complex for life science research,
training, and manufacturing. Lonza's investment, which is scheduled to begin in 2011, is expected to take place in two phases.
Both phases will include expanding manufacturing capabilities as well as biologics research and development.3 Another example is the Indian CMO, Kemwell, which recently announced plans to build a new biopharmaceutical manufacturing
plant in Bangalore, in collaboration with the German company Boehringer Ingelheim (BI).4
Lonza and BI together hold over half of the market for outsourced protein APIs.5 The decision by Lonza and BI to make these important investments in manufacturing facilities to India reflects the West's
changing view on offshoring biologics to India and will facilitate future collaborations between Indian manufacturing companies
and other multinationals.
Western CMOs are not the only ones investing in India, of course. For example, Mumbai-based Reliance Life Sciences, which
started off in 2001 developing stem cell products and expanded into biopharmaceuticals in 2006, set up a collaboration in
2007 with GeneMedix, a UK company with a pipeline of biosimilars.5
Other Indian biotech firms, meanwhile, are developing biologics based upon technology transferred from abroad. For example,
Bharat Biotech International (Hyderabad) and the Serum Institute of India (Pune) have licensed various vaccine technologies
from institutions in Canada, the United States, and the Netherlands. Bharat Biotech International is the first vaccine manufacturer
in a developing country to produce a foreign proprietary product, i.e., Wyeth's (now Pfizer's) Haemophilus influenzae B (Hib) vaccine.9