We also visited dedicated contract services companies offering discovery, API process development, and formulation-development
services, along with clinical-scale manufacturing. These companies are largely targeting Western bio/pharmaceutical companies
as their key clients, although they are finding clients within India as well. The impression left by these companies was decidedly
mixed. Some reflected a high level of sophistication and understanding of what Western companies are looking for and expect,
and others offered barebones facilities that generally would not pass muster with prospective clients from major bio/pharmaceutical
The performance of these services-only companies varied. Those offering discovery and process-development services appear
to be doing quite well while those offering formulation-development and early-stage clinical trial material (CTM) services
are not as robust. The global bio/pharmaceutical companies began turning to Indian and Chinese CROs for discovery and process
chemistry services almost 10 years ago, and several companies have emerged as world-class service providers. We visited the
Hyderabad campuses of two of industry leaders in chemistry outsourcing, GVK Bio and Aptuit, and came away impressed with the
sophistication of their leadership and quality of their facilities and operations.
The challenge for formulation-development companies seems to be two-fold: the local market for CTM is somewhat limited because
bio/pharmaceutical companies cannot conduct first-in-man studies in India, and expenditures for early formulation-development
services are so low at most Western companies these days that the expected cost savings from going to India are minimal. Near
term, we think those companies are going to have to establish a laboratory presence in Western markets to capture that early-phase
business, with the intention that the products can be transitioned to Indian facilities as the products approach commercialization.
Longer term, the formulation-development CROs will benefit as global bio/pharmaceutical companies establish more R&D operations
in India and source more of their needs locally.
My overall conclusion is India is building a base for a strong local contract services industry in the coming years. The threat
for Western contract development and manufacturing organizations (CDMOs) and CMOs is small in the near-term, but as global
bio/pharmaceutical companies target this fast-growing market, Indian firms will be well-positioned to seize the opportunity.
Jim Miller is president of PharmSource Information Services, Inc., Springfield, VA, 703.383.4903, email@example.com