Contract manufacturing and research services in context
Custom synthesis
Custom
synthesis forms an integral part of Contract Research and Manufacturing
Services (CRAMS) business across the globe. Custom synthesis involves supplying
initial raw material, reference compounds, derivatives of lead compounds and
intermediates, especially for molecules in the development stage or drugs under
patent exclusivity period. For instance, many CMOs such as Lonza offer services
to manufacture customized APIs and advanced intermediates for big pharma
companies. Their services encompass the entire life cycle of a drug from
pre-clinical research stage to post launch. For example, Indian CRAMS provider,
Divis Laboratories undertakes custom manufacturing of APIs and production of
advanced intermediates over the entire lifecycle of a product and is also a
preferred contract manufacturing partner for many pharmaceutical companies across
the globe. A strong chemistry skill-set, expertise in process development and
high number of FDA compliant cGMP manufacturing sites gives Indian CMO
companies an added advantage over other countries.
Contract manufacturing in pharma
The
global pharmaceutical manufacturing outsourcing market is estimated at around
$35–45bn. Outsourcing is more prevalent in the active pharmaceutical
ingredients (API)/intermediate segment than in finished dose forms. Moreover,
it is also believed that almost 50% of the API/intermediate production is
outsourced all over the world, while only 15% is outsourced for formulations.
Unit costs of goods, intellectual property protection, and dependability of
supply are the key factors in outsourcing. Innovator pharmaceuticals are more
inclined to outsource API/intermediate when compared with finished dose forms
due to the following reasons:
- Quality requirements are more stringent in formulations, as they are the final product. In addition, it is very difficult to correct such products when quality issues arise. However, an API/intermediate can be reprocessed to meet quality requirements;
- From a supply-chain perspective, it is easier to handle API outsourcing than formulation outsourcing. In API/intermediate, the product is transferred between limited points from the outsourcing location to a few formulation facilities. However, in formulation, the finished product is transferred from the facility to various segments of the distribution channel.
Within
finished dose forms, the plain formulations, such as capsules and oral tablets
are outsourced more frequently compared with steriles/injectables, which demand
more stringent quality norms. However, Business Insights analysis indicates
that outsourcing business will increase in recent years, both in the cases of
API/Intermediate and finished dose forms.
Outsourcing
to India has gradually moved up the value chain from intermediates and APIs,
clinical trials, marketing and sales and drug discovery. Leading Indian
contract manufacturing players are moving away from a reliance on the domestic
market to the development services to regulated markets, and cooperative
agreements with multinational pharmaceutical companies.
