7/28/2019 49264752-CRAMS
1/1
Emerging opportunities in CRAMS
The Contract Research and Manufacturing Services (CRAMS)
industry can be estimated to be churning revenues of $850 million
annually. It is worth noting the momentum gained by this segment of
the Indian pharmaceutical industry. Over the lastfive years, CRAMS
industry has been contributing close to eight percent to thetotal
Indian pharmaceutical business. Factors like a vast expanse of
specialty h
ospitals with state-of-the-art facilities (nearly 7,00,000
hospital beds and 221medical colleges); large English speaking
population and rich talent pool; diverse population and diverse
gene pool; increasing number of chronic diseases anda combination
of diseases characteristic of developing and the developed
countries is expected to propel the CRAMS industry to grow at a
CAGR of over 25 percentfrom 2006 to 2011.
CRAMS pertains to outsourcing services/ products from low-cost
providers with world class standards, in line with international
regulatory norms like the USFDA,Australian-TGA, UKMCA, and EMEA.
Pharmaceutical multinationals have traditionally been outsourcing
intermediates, API's and formulations. Since late 1990s, CRAMS has
gained more importance, as MNCs have come under pressure to
maintain thei
r profitability. Over the last few years, the need to outsource
has increased considerably for big pharmaceutical companies, and
outsourcing is gradually movingfrom being just a tactical or
opportunistic option to a more strategic one to sustain the demand
from markets moving into the generic phase. Globally, drugs worth
$70 billion would be going off-patent by 2011 and Indian companies
providingcontract manufacturing services are expected to garner
approximately 30-40 percent of this opportunity. The pre-patent
regime in India gave an impetus to the existing reverse engineering
skills of Indian pharmaceutical companies. This wascritical to
supply drugs at low cost for captive domestic consumption, which
ledto adjacencies like superior chemistry, regulatory and
manufacturing skills. Benefits like availability of skilled labour
at low cost (labour costs in India are around 1/7th the levels in
developed countries), capital efficiency in settingup of
world-class facilities in line with USFDA norms at a reduced cost
of arou
nd 25-50 percent due to access to locally fabricated equipment
and high qualitylocal technology/engineering are passed on directly
to MNCs seeking to market drugs at lower cost.
One set of players like Dishman, Divi's Labs, Shasun have
practically no front-end presence in marketing finished products;
their focus/mainstay has always beenlow cost manufacturing,
intervening at a crucial point of the value-chain fromwhere they
have managed to evolve into providing high-end, complex
manufacturingservices. Such companies now boast of a robust
portfolio of MNC clients like Solvay, AstraZeneca, Merck,
GlaxoSmithKline and Eli Lilly.
Second set of companies like Nicholas Piramal, Cadila
Healthcare, Orchid Chemica
ls and Pharmaceuticals, too have gained a strong foothold in the
CRAMS arena utilising excess manufacturing capacities. Companies
like those mentioned here, have then moved into providing drug
discovery, custom chemical synthesis services and the like.
There is another set of players like Veeda Clinical Research,
iGATE Clinical Research International, SIRO Clinpharm, Neeman
Medical International, HCL Systems,Cognizant Manipal Acunova,
ClinInvent that provide services for Phase I-IV Trials, IT support
for intensive data management, high throughput screening at
earlydiscovery stages. Indian CONTRACT research service providers
have established astrong foothold in the early and late clinical
stages of contract research services. However, domains such as
pre-clinical and early discovery remain unexplored. These segments
have untapped potential; services like bioinformatics, medicina
l chemistry and regulatory filings can be offered, which form
the ground for newdrug discovery or contract research. This segment
under CRAMS is dynamic and still evolving into a well established
offering.
