Ernts N Young Pharma Sector 2009

Taking wings
Coming of age of the Indian

pharmaceutical outsourcing industry

Ranga Iyer
President
OPPI

The engineering industry has discovered Indias talent and potential for what an automobile
maker called frugal engineering. Global automakers are now tapping Indias engineering
resources to improve their competitiveness.

A similar revolution is under way in the pharmaceutical sector. As this OPPI-Ernst & Young
study reveals, India has emerged as a growing customs manufacturing and outsourcing
destination with a growth rate of 43% that is thrice the global market rate.

I am sure that this study will be an eye-opener for everyone on the growing potential of Indias
vibrant pharmaceutical sector.

Organisation of Pharmaceutical Producers of India

Taking wings
Coming of age of the Indian
Pharmaceutical outsourcing industry

Taking wings 2
Table of contents
Foreword Introduction Executive summary Insight into pharma
outsourcing to
India
Acknowledgement Glossary of terms
Coming of age of the Indian pharmaceutical outsourcing industry 3
Section 1 :
Trends in the global
pharmaceutical industry
and resultant shift to
outsourcing
Section 2 :
Custom manufacturing
services
Section 3 :
Drug discovery and
development services
Foreword Introduction Executive summary Insight into pharma
outsourcing to
India
Acknowledgement Glossary of terms
Taking wings 4
Foreword
Tapan Ray
Director General
OPPI
Dear reader,
By 2020 India is expected to be one of the top 5 pharma
innovation hubs with one out of every 5 to 10 drugs discovered
worldwide coming from India, as reported by The Economic
Times dated 14 March 2009 quoting Mr. Ashok Kumar,
Secretary, Department of Pharmaceuticals, Ministry of
Chemicals and Fertilisers, Government of India.
Focused actions aimed at building world class infrastructure,
creation of a large talent pool through public-private
partnerships, offering fnancial incentives to encourage
innovation and shaping a favorable regulatory environment will
help propelling the country in this direction faster.
Towards this effort, the Organisation of Pharmaceutical
Producers of India (OPPI) has been undertaking, over a
period of time, a series of research studies to meet the unmet
information needs of the stakeholders to help improving the
healthcare environment of the nation. We are pleased to share
that to encourage innovation in the country; OPPI has recently
collaborated with two premier R&D focused institutions, National
Institute of Pharmaceutical Education & Research (NIPER) and
Council of Scientifc & Industrial Research (CSIR) through a
Public-Private Partnership (PPP) initiative.
Decreasing R&D productivity and increasing cost containment
pressures are driving the global pharmaceutical companies to
contract out some research related and manufacturing activities
from North America and Europe to low cost destinations of
the world like, India and China. A global survey done by the
Economist Intelligence Unit (EIU) about two years ago on the
preferred centers for overseas contract research indicates
39% preference for China and 28% preference for India. The
Indian Pharmaceutical industry is poised to grab this opportunity
with its world class facilities and large pool of English speaking
skilled manpower.
By 2010 global Contract Research and Manufacturing Market
(CRAMS) is expected to reach around USD66b (excluding clinical
trials), when Indian CRAMS market will be around USD3.8b
(excluding clinical trials) with CAGR of 51%. The global market
for contract manufacturing is highly fragmented. The market
share of top 10 companies in this feld is just around 30%.
Realising the importance of the CRAMS sector, Global Sourcing
Committee of OPPI spearheaded by Mr. Alok Sonig, Managing
Director, Bristol-Myers Squibb took the initiative to partner with
Ernst and Young for a study on the Indian Contract Research
And Manufacturing Services (CRAMS) sector.
This report captures the opinions of the key stakeholders like,
the customers, the suppliers, the regulatory authorities, various
experts group to highlight Indias potential in the CRAMS space.
I compliment the members of the Global Sourcing Committee of
OPPI and the Ernst & Young team for preparing this important
research report aimed at offering signifcant value to the
stakeholders in pursuit of excellence.
Taking wings 6
Alok Sonig (MD, BMS India)
Chairman
OPPI Global Sourcing Committee
Dear reader,
On behalf of OPPIs Global Sourcing Committee, I am pleased to share this comprehensive, yet succinctly summarized, body of work
put together by the OPPI and Ernst & Young.
India and outsourcing are invariably used in the same sentence. We all know that India has become an established player across
industries such as I.T. and other G&A functions such as Human Resources and Finance. While this has happened due to cost
advantages, skilled workforce, and a favorable political and economic environment, the OPPI and Ernst & Young teams undertook this
initiative to better and more specifcally understand the current and future drivers of growth for outsourcing pharmaceutical R&D and
manufacturing to India.
The team reached out to several pharmaceutical leaders and professionals worldwide, both suppliers and customers of services, to
develop a balanced perspective on Indias capabilities in these areas and the outlook ahead.
The worldwide pharmaceutical industry is keenly looking at driving effectiveness and effciencies in R&D and Manufacturing and is
looking at India with renewed interest. I am confdent that this report will provide a renewed and rich perspective as global players
gear up to make signifcant bets on the Indian R&D and manufacturing capabilities.
Id like to thank members of the OPPI sourcing committee Ms. Mukta Arora, Eli Lilly (Vice Chairperson), Dr. Ashoke Banerjee, GSK
Pharmaceuticals, Mr. Jayant Dwivedy, Piramal Healthcare, Mr. Nilesh Wadhwa, Sanof-Aventis, Mr. Chittur Devaraj, Wyeth and the
Ernst & Young team who have made this comprehensive report possible.
Dear reader,
For many decades, the pharmaceutical and biotechnology
industry has been considered an evergreen industry. It has
weathered recessions, downturns and upturns and has provided
investors with certain risk/reward that was well understood and
documented. The rate of change in this industry, compared with
most of the others, has always been sedate with a group of few
pharmaceutical companies driving its future.
This decade has seen perhaps the most signifcant changes in
the fortunes of the pharma industry:
Development of new products, the real driver of growth and
proftability, has seen a serious drop in approvals, against a
backdrop of ever increasing R&D costs.
There has been an emergence of biologics as a signifcant
driver of new R&D. Many of the established pharmaceutical
companies have had to make changes/acquisitions to align
their portfolios to include a larger biologic presence.
On the other end of the product life-cycle, the ever
strengthening generic competition has meant rapid declines
in sales of products going off patent.
The global fnancial crisis of the past two years has added the
fnal challenge in that the key markets, US & Europe, have
had low/no growth.
Big Pharma in particular have had to take a look at their
business models and refocus energies towards new growth
opportunities (biologics, cytotoxics and emerging markets) as
well as evaluate more cost effcient operating models. The result
has been that the innovative pharmaceutical industry has moved
into a faster trajectory of outsourcing and offshoring of R&D
and manufacturing across APIs and dosage forms. The global
outsourcing industry is USD51b and growing at 14%; faster than
the global pharmaceutical industry growth.
India is perfectly positioned to be a preferred destination for
global pharmaceutical companies to outsource R&D as well as
manufacturing. Some of the key drivers being:
Track record of supplying pharmaceutical API and
formulations globally (with all the requisite quality and
regulatory approvals in place) particularly small molecule
Strong cost/quality proposition. Lower costs and strong
supply of skilled manpower (scientists, QA/QC professionals
etc) and capital effciency
Diverse and wide group of companies who have acquired
this capability
India as a outsourcing market is USD1.1b and growing at
~51%. The opportunity for growth for Indian as well as global
companies looking at setting up in India is very strong and
sustainable for the foreseeable future.
The Indian outsourcing industry has overcome many hurdles
along the way and is now poised to assume the mantle
of leadership as a strategic partner of choice for global
pharmaceutical companies across the areas of R&D
and manufacturing.
This publication, collaboration between OPPI and Ernst & Young,
attempts to characterize the Indian outsourcing landscape, its
capabilities, challenges and opportunities, all of which could
make it the preferred destination for partnering, especially
when outsourcing decisions are increasingly becoming strategic
in nature.
The times we are going through encourage you to explore,
engage and partner with the Indian outsourcing industry, which
is truly at an infexion point.
Ajit Mahadevan
Partner
Ernst & Young
Hitesh Sharma
Partner
Ernst & Young
Taking wings 8
Introduction
Introduction
This report is a collaboration between Organisation of Pharmaceutical Producers of India (OPPI) and
Ernst & Young and aims to present to you:
Trends in the global pharmaceutical industry that are leading to an increase in outsourcing
An assessment of the capabilities and potential for growth of the Indian custom manufacturing and
drug discovery and development outsourcing industry in light of the customer expectations from
their outsourcing service providers
While this report covers clinical trials supplies, it does not cover clinical trials services market.
Lead molecule
identied
Launch
Discovery
On-patent
growing
On-patent
mature
Pre-launch Off patent
Discovery
research
Expiry
Development Full scale manufacturing
Research
biology
& chemistry
Pre-
clinc.
Ph
I
Ph
IIb
Ph
III
Ph
IIa
Contract research
Contract manufacturing
The viewpoints and conclusions presented in this report are an outcome of discussions with various
stakeholders, i.e., customers, suppliers, regulators, key opinion leaders and data available in public
domain and our industry understanding. As part of this initiative, we have interviewed/interacted
with more than 50 respondents across 30 organizations including large and medium pharmaceutical
companies across US, Europe and India; Indian suppliers and regulatory authorities. Further, as part
of this report, a benchmarking survey has been conducted, to assess relative attractiveness in custom
manufacturing outsourcing of six countries/geographies India, China, Eastern Europe, Puerto Rico,
Singapore and Ireland. The fndings of this survey are presented as part of this report.
This report is intended to serve as a reference document for the global pharmaceutical community to
explore, assess and partner with India in the pharmaceutical outsourcing segment. It does not consider
the investment objectives, fnancial situation and impact of specifc business decisions associated with
outsourcing in general and India in particular.
Pharmaceutical value chain
Taking wings 10
Executive summary
The global pharmaceutical and biotechnology
industry is in the midst of challenging times.
In 2008, the global pharmaceutical market has grown at
the slowest rate in this decade and is expected to slow down
further. The market reached USD773 billion at a growth
rate of 4.8% in 2008, which is the slowest growth rate of
the decade. The two largest markets, the US and Europe
which contributed almost 73% of the global market in 2008,
achieved growth rates of 1.4% and 5.8% respectively. Going
forward, the US market is expected to stagnate or decline
further over the next fve years while the European market
is expected to grow at a sluggish pace with a CAGR of 2 - 5%
for 2008 - 2013. There are primarily four reasons for
this slowdown:
Decreased R&D productivity: during the eight year
period between 2000 and 2008, while the total R&D
spend of pharmaceutical companies has increased
from USD53 billion to USD129 billion, the number of
drugs approved has declined. This decreased R&D
productivity is due to the increased failure rate in trials
and higher cost of developing new drugs due to stricter
regulatory requirements.
Current global fnancial crisis: the crisis has severely
affected the liquidity of small biotech companies; with
44% of the US biotech companies having less than a years
operating cash and 26% having less than six months
of operating cash. Further, the consumer spend on
healthcare has declined, refected by a drop in the number
of prescriptions in the US by 2% for the frst time in a
decade in 2008-09.
Increasing penetration of generics: penetration of generics
in US, in terms of their share in total prescriptions, has
increased from 47% in 1999 to 63% in 2007 .Going
forward, this is expected to increase further driven by
impending patent expiries and measures by governments
to reduce healthcare costs.
Fewer and smaller blockbusters: decreased number of
blockbuster approvals to replace the existing ones going
off patent and reduced sales potential of recently launched
drugs will further decelerate the market growth. The
sales of blockbuster drugs have grown only 9% in 2007
compared to 24% in 2004. Further, projected sales of top
10 NMEs launched in 2008 show no potential of achieving
a blockbuster status in the next 5 years.
Executive summary
These challenges have forced the industry to
look at three key imperatives for creating and
sustaining proftable growth new technology,
emerging markets and effciency enhancement
Pharmaceutical companies are tackling the slowdown by
focusing on new technologies, participating in emerging
markets and enhancing effciency.
The companies are focusing on biologics, which is making
rapid in-roads in the global pharma industry and is
projected to have a share of 23% of total market and 50%
of top 100 molecules in 2014. Other new technologies
which are increasingly becoming areas of interest are
the ones required for complex chemistries, such as
lower-temperature technology that can suppress side
reactions and increase reaction selectivity, chemical
decontamination technology for cytotoxics and research
in nanotechnology.
Emerging markets are expected to be the key engines
of growth for the global pharmaceutical market. While
there has been a slowdown in the western pharmaceutical
market, emerging markets which form 18% of the
global pharmaceutical market, continue to drive growth
contributing 49% of the total growth in 2009. Emerging
markets outperformed developed markets in terms of
growth with a CAGR (2003-2008) of 12-13% whereas
CAGR for developed economies stayed around 6-8% for
the same period.
Pharmaceutical companies are focusing on restructuring
and implementing cost containment initiatives. Almost all
of them have announced cost reduction programs over the
past few years. They are increasingly using acquisitions
as a key strategy for sustained growth and adopting a
networked operating model to boost effciencies, gain
access to technologies and to emerging markets. Through
networked model, pharmaceutical companies have been
increasingly becoming reliant on using third parties to
improve effciencies through in-licensing, out-licensing,
collaborations and outsourcing.
Taking wings 12
Outsourcing is no more an option but a strategic
imperative for pharmaceutical companies across
the globe
Over the past two decades, there has been a shift in the pattern
of outsourcing. Companies have moved from outsourcing
non-core functions to routinely outsourcing a number of
core functions such as manufacturing and drug discovery
and development. Between 2006 and 2009, percentage of
big pharma companies considering outsourcing for strategic
advantage has increased from 42% to 57%.
The global R&D and manufacturing outsourcing market
(excluding clinical trials) is USD51 billion in size and
represents 19% of total global pharmaceutical R&D and
manufacturing spend in 2008.
Across the value chain, the penetration of outsourcing varies
signifcantly with approximately 55% penetration in API
manufacturing and 15% penetration in dosage (formulation)
manufacturing.
The R&D and manufacturing outsourcing market has two
major segments custom manufacturing services and drug
discovery and development services.
Custom manufacturing, spans from clinical trial phase
II b to the off-patent stage and includes manufacturing
of intermediates, APIs and formulations. Global custom
manufacturing services market is valued at ~ USD33 billion
and is projected to grow at a CAGR of 13% between 2007
2010. The growth of this industry is driven by:
Rationalization of plants due to low capacity utilization:
Big Pharma companies have built huge capacities over the
years and with products moving to the late lifecycle, these
companies are operating plants at only 2030% capacity.
As a result, more companies are looking at divesting such
plants and outsourcing while retaining marketing rights for
the products thereby reducing their fxed costs.
New operating models for companies: Many of the virtual/
emerging biopharma/biotech companies do not have an
internal capacity for manufacturing and outsource it while
retaining only the marketing rights.
Emergence of biologics: As a high percentage (~75%)
of the current pipeline is from biologics and cost of
investing in a new manufacturing facility is high, companies
prefer to outsource manufacturing rather than to invest in
a facility.
Drug discovery and development, spans from target
identifcation though lead optimisation till clinical trial IIa.
Global drug discovery and development services market is
valued at ~ USD18 billion and is projected to grow with an
estimated CAGR of 17% over 2007 2010.
Globally, pharmaceutical companies are shifting their outsourcing
activities to Asian markets with India emerging as one of the most
attractive destinations.
India is a fast growing custom manufacturing
outsourcing destination with a growth rate of
43% that is thrice the global market rate. This
is driven by its ability to create a differentiating
cost value proposition powered by its lower
manufacturing costs, skilled manpower and strong
technical capabilities
Assurance, quality and service are the ticket to play in the
custom manufacturing space while cost and innovation serve as
differentiating criteria for selection. The India story is driven by
its offering of a cost value proposition comprising cost effciency
along with skilled manpower and technical capabilities.
As per our survey conducted as part of this study, India is rated
highest in terms of its cost effciency attractiveness among
six countries India, China, Eastern Europe, Puerto Rico,
Singapore and Ireland. Approximately 67% of the respondents
have rated India as excellent and rest 33% have rated it
above average.
Indias cost effciency is driven by its low manufacturing
costs which is only 35-40% of the cost of manufacturing in
the US supported by its low installation and manpower cost.
Around 90% of the respondents have rated India either
excellent or above average for its technical capability
attractiveness. This is demonstrated by the following:
It has manufacturing prowess in both APIs, where India is
the 3rd largest player in the world with 500 different APIs
and in formulations where it manufactures 60,000 packs
across 60 therapy areas.
India currently accounts for 8% of the global
pharmaceutical production making it the worlds 4th
largest pharmaceutical producer.
Vertically integrated model of Indian players to offer end-
to-end services across development and manufacturing in
both formulations and APIs.
It has around 119 USFDA and 84 UK MHRA approved
plants and accounts for one third of DMFs and highest
number of ANDAs in the US.
Approximately 90% of the respondents have rated India
either excellent or above average for its skilled manpower
attractiveness.
India offers a large pool of English speaking skilled
manpower. Every year, around 1.6 million graduates and
0.4 million post graduates qualify in science courses.
While the growth in the North American and European
markets is expected to slow down to -1 to 2% and 2 - 5%
respectively over 2008-2013, the growth of emerging
markets would be 11-14%.This increasing infuence of the
emerging markets will position India in the proximity of the
markets driving growth of the pharmaceutical industry.
Share of emerging markets in clinical trials has been
increasing and India is emerging as a hot spot as compared
to most emerging markets, with a robust growth of 31%
p.a. over the last four years. This trend will increase Indias
proximity to the clinical trial supplies market.
67% of respondents have rated India above average both
on project management attractiveness and response
time attractiveness indicating that India has developed
strong project management capabilities with reduced
turnaround time
While India needs to improve its IP perception Indian
companies are adopting various business models to ensure
partnering with global companies and have been successful in
doing so.
In order to further strengthen Indias position in the
pharmaceutical manufacturing outsourcing market,
government has taken or planning to take several initiatives
such as
Streamlining and reducing time frame for approvals
involving NOC manufacturer and NOC export licenses from
8 12 weeks to 2 weeks.
Providing infrastructure support such as building
Pharmazones, a separate dedicated temperature
and atmosphere controlled area to maintain the safety,
effcacy, and quality of imported and export drugs/
pharmaceutical products at international airports at Delhi,
Hyderabad and Mumbai.
Building capabilities through collaboration with western
countries such as MoU with US FDA, WHO, Health Canada,
South Africa and EMEA.
All the above factors have been instrumental in the Big
Pharma conducting their sourcing operations from India and
attracting global CMOs like Lonza, Patheon, DSM and Albany
Molecular Research Institute to set up base or collaborate
in India.
India is thus well poised to become the strategic partner of
choice in the arena of contract manufacturing
Taking wings 14
In drug discovery and development services, India
is emerging as a hot spot, growing at ~ 65%, i.e.
more than three and half times the global growth
rate driven by strong chemistry capabilities,
skilled manpower and cost value proposition
Each stage of the discovery and development cycle has different
requirements, but certain attributes are required across the
value chain. While speed of delivery is more important in case
of development, innovation is more important in case of drug
discovery. Flexibility, integrated capabilities and cost value
proposition are the attributes applicable across both drug
discovery and development. Indias story is driven by cost
competitive strong chemistry capabilities supported by talent
pool of skilled professionals and R&D infrastructure.
India has developed strong capabilities in process chemistry,
medicinal chemistry and analytical chemistry. Further,
process development and scale up capabilities for clinical APIs
and formulation manufacturing across various dosage forms
such as solids, semi-solids, liquids, powders (lyophilisation)
and parenterals have also been undertaken.
India has developed pre-clinical services capabilities with
a number of animal testing facilities (existing and under
development) using dogs and primates.
India offers signifcant cost arbitrage in end-to-end research
and development with potential savings of 61% as compared
to US. Further, India offers an abundant pool of professionals
in the area of drug development and research chemistry with
~ 50,000 pharmacists and 150,000 chemistry post graduates
qualifying every year.
India has more than 200 DSIR (Department of Scientifc and
Industrial Research) approved in-house pharmaceutical R&D
units and 48 GLP compliant R&D facilities.
Big pharma companies and global outsourcing service
providers have started focusing on India for drug
development and research chemistry. Big pharma companies
have adopted different operating models such as captive off
shoring, dedicated R&D unit in partnership, fee for services
and collaboration/JV.
However, India lacks a culture of innovation due
to legacy issues such as low levels of funding,
collaboration between industry, academia and
educational infrastructure
India spends only 0.8% of its total GDP on research and
innovation which is much lower as compared to developed
countries such as US (2.8%), Japan (3.1%), Germany (2.5%)
and France (2.2%).
A two-way traffc of knowledge and experience between
industry and academia is quintessential for innovation .Unlike
in the west, the transfer of knowledge between industry and
the academia is comparatively lower in India due to minimal
movement of people from the industry to the academia and
vice versa. While recently there has been some movement
from academia to industry, this needs to increase signifcantly
and the movement from industry to academia most certainly
needs to gain traction, to ensure cross fertilisation of ideas.
To innovate, scientists need to draw from different disciplines
like mathematics, biology & chemistry; however the education
system in India creates scientists who have little exposure
across disciplines due to the excessive focus on specialization
and minimal opportunity to change disciplines. Lack of
interdisciplinary processes is one of the factors that has
hampered innovation in drug discovery in India.
Indian educational institutes do not have the relevant
exposure to the industry and follow a curriculum which
does not include courses like programs in regulatory affairs,
IPR, legal issues and scientifc development. Further, less
attractive career options in the area of research result in
students either not opting for research as profession or
migration from India in search of better options. For instance,
39% of the pharmacists working in the US are of Indian origin.
The Indian government has recognized the
need to build an environment conducive for
research and innovation and has planned/
implemented a number of initiatives to provide
the much needed impetus to research and
innovation in pharma & biotech
The Government of India is embarking on a major multi-billion
dollar initiative with 50% public funding through a public-
private-partnership model to harness Indias innovation
capability. The vision is to catapult India into one of the top
fve pharma Innovation hubs by 2020 with one out of every
fve to ten drugs discovered worldwide by 2020 coming
from India.
The Government of India is promoting collaboration among
industry, academia and government through various
programs such as New Millennium Indian Technology
Leadership (NMITLI) and Drugs and Pharmaceuticals
Research Program (DPRP).
Government has set up 7 NIPERs as institutes of national
importance to achieve excellence in pharmaceutical sciences
and technologies, education and training.
These initiatives have motivated Indian pharmaceutical
companies to pursue drug discovery programs. Indian
companies are pursuing new drug discovery research and
have more than 50 candidates across different stages of
drug pipeline.
However, India needs to rapidly build its research biology and
further enhance its development capabilities to emerge as a
partner of choice for early stage discovery and patented
product launches.
Despite Indias inherent advantages, it accounts
for only ~3% share of global outsourcing market,
indicating signifcant opportunity for growth in
this segment.
The global pharmaceutical and biotech industry is yet to harvest
the full potential of Indias skilled talent pool, strong technical
capabilities and cost value proposition. This can be attributed
to the perception arising from its legacy of IP regime and its
branded generic market image, which have in the past hampered
global pharmaceutical companies from taking advantage of the
value proposition offered. This mindset has been undergoing a
sweeping change and India has set its sights on becoming the
strategic partner of choice to the global pharmaceutical industry.
This can be achieved in both arenas by;
Custom manufacturing: Building infrastructure, instilling a
culture of quality & acquiring newer technology capabilities
such as biologics, cytotoxics and lyophilization for custom
manufacturing and
Drug discovery and development services: Creating global
reach, developing end to end service offerings, building
a culture of process safety and quality, creating a project
management mindset, investing and building biologics,
research biology, lyophilization and cytotoxics capabilities to
capitalize on future high growth opportunities.
The Indian pharmaceutical outsourcing service provider
community is committed to demonstrate the capability
required to enhance its credibility further in global
pharmaceutical industry.
Taking wings 16
Section 1: Trends in the global pharmaceutical industry
and resultant shift to outsourcing
Section 1
1.1 The global pharmaceutical market has grown at the slowest rate in this
decade and is expected to slow down further. This is being shaped by:
Declining R&D productivity
The current global fnancial crisis
Increasing genericization
Fewer and smaller blockbuster
1.2 The industry is focusing on three key imperatives to sustain growth:
Investing in new technology platforms
Building a presence in emerging markets
Enhancing effciency in operations
1.3 Acquisitions and the networked model have emerged as the key levers
being deployed by the industry to meet these strategic imperatives.
Taking wings 18
1.1 The global pharmaceutical market has grown at
the slowest rate in this decade and is expected
to slow down further. This is being shaped by:
Declining R&D productivity
The current global fnancial crisis
Increasing genericization
Fewer and smaller blockbuster
Section 1
Global pharmaceutical market growth the slowest in this
decade and expected to slow down further
The growth rate of the global pharma market has less than halved in the last decade
The global pharmaceutical market reached USD773b, at a growth rate of 4.8%, in 2008, which is the slowest growth rate of the
decade. The two largest markets, the US and Europe, which contributed almost 73% to the global market in 2008, achieved growth
rates of 1.4% and 5.8%, respectively
1
.
Going forward, it is estimated that global market growth rates will decline further. The US market is expected to stagnate or
further decline over the next fve years. The European market is also expected to grow at a sluggish pace with a CAGR of 2 to 5%
for 20082013
1
The only silver lining in the global pharma market is expected to come from emerging markets, which, according to IMS forecasts,
will collectively grow at 1316%
1
.
Global Pharma market size trend
Source: IMS Health Market Prognosis , March 2009
393
715
773
648
605
6.6%
11.8%
7.2%
6.8%
4.8%
0
200
400
600
800
2001 2005 2006 2007 2008
0%
2%
4%
6%
8%
10%
12%
Market size in
USDb
% Growth over
previous year
Source: 1.IMS Health Market Prognosis, March 2009
Taking wings 20
Four key structural trends affecting pharma market
de-growth
Global pharmaceutical
market de - growth
Decreasing
R&D
productivity
Increasing
penetration of
generics
Fewer and smaller blockbusters Current global nancial crisis
market de - growth
market de-growth
Decreasing
R&D
productivity
Increasing
penetration of
generics
Fewer and
smaller
blockbusters
Current
global
nancial
crisis
1
2 4
3
Despite increasing R&D spend and number of
active compounds in development, no signifcant
change in the number of approved NMEs
Decreasing R&D productivity 1
53
59
67
76
85
92
103
114
129
2000 2001 2002 2003 2004 2005 2006 2007 2008***
Note: *** CMR international 2008 pharmaceutical R&D factbook
Growth in R&D expenditure in USDb from 2000-2008
Source: Evaluate Pharma Alpha World Preview 2012, CenterWatch Analysis,
CDER, PhRMA Industry Prole
Although the R&D spend has more than doubled from
USD53b in 2000 to USD129b in 2008, the number of NCE
approvals have shown a largely declining trend with a historic
low of only 18 in 2007 before correcting to 25 in 2008.
Further, while there has been an increase in the number of
approved NMEs in 2008, the percentage of new products,
which offered a signifcant improvement* over currently
marketed products, fell from 44% in 2007 to 36% in 2008.
1
Over the last fve years, the average number of active
substances in the development for the frst launch has
increased steadily across companies. However, this has yet to
be refected in new product approvals.
market de-growth
Decreasing
R&D
productivity
Increasing
penetration of
generics
Fewer and
smaller
blockbusters
Current
global
financial
crisis
market de-growth
market de-growth
Decreasing
R&D
productivity
Increasing
penetration of
generics
Fewer and
smaller
blockbusters
Current
global
nancial
crisis
1
2 4
3
27
24
18
19
36
20
22
18
25
2000 2001 2002 2003 2004 2005 2006 2007 2008
Number of NME approvals

(2000 - 2008)
Source: CDER NME, BLA Approval 2008
Trend in mean number of active substances** developed for
rst launch (2003-2007)
36
39
46
48
52
2003 2004 2005 2006 2007
Note: **Active substance (AS): The active ingredient that is intended to furnish
pharmacological activity or other direct effect to a pharmaceutical product this
may be a chemical, biological, biotech or radiopharmaceutical substance that is or is
destined to be made available as a prescription only medicine, to be used for the
cure, alleviation, treatment, prevention or in vivo diagnosis of diseases in humans
Source: CDER NME, BLA Approval 2008
Note * As defned by the CDER; signifcant Improvement compared to marketed
products in the treatment, diagnosis or prevention of the disease and are under a
priority review
Source: 1.CDER NME, BLA Approval 2008
Taking wings 22
Declining R&D productivity due to increasing failure rate
of NMEs and high costs incurred in developing molecules
for complex therapies
The decrease in R&D productivity has been due to:
Increasing failure rate in trials
An increasing number of projects are being terminated at the
Phase III stage. This has increased by 25% between 2002
2004 and 20052007, resulting in fewer NME approvals.
Increasing cost of developing a new drug
The average cost of developing a new drug has increased
from USD1.1b in 2004 to USD1.3b in 2008.
Source: Tufts Center for drug development
Annual drug withdrawal, based on NME, and the withdrawal
data for preceding periods indicates a sharp rise ranging
from 410% and an average of 7%
1
. Thus, stricter FDA
regulations have increased the need for more extensive
data submissions.
Number of projects terminated in Phase III
31
36
35
39
2002 - 04 2003 - 05 2004 - 06 2005 - 07
Source: 2008 CMR International, a Thomson Reuters business
Based on data provided for all years by 19 companies
In addition, the FDA requires companies to monitor drugs after their launch for safety, and can at times require specifc additional
data. Such data is known as post-marketing commitment (PMC). Over the last decade, the number of PMCs has increased by 50%,
resulting in a signifcant cost increase
2
.
Source: 1. Analysis Group Inc, 2. Datamonitor
Increase in time taken for trial completion and
drug approval
Longer trials with higher complexity result in increased costs.
Six therapy areas, oncology, CNS, respiratory,
endocrinology, cardiovascular and infectious diseases,
account for 68% of all clinical trial protocols.
These therapies require a larger number of patients
per trial, e.g., the mean patient enrolment rates in the
therapies mentioned above for Phase III trials is nearly
twice as much as compared to other therapies.
Source: Karlberg, 2008, EY FICCI Report
Parameters 1999-2002 2003-2006
Average duration of
Phase 1-3
5.8 years 7 years
Protocol design to
database lock time
460 days 780 days
Patient recruitment
rates
75% 59%
Volunteer retention 69% 48%
Reduced funding to mid-tier and small pharma/
biotech companies and decreased consumer
spending due to fnancial crisis
market de-growth
Decreasing
R&D
productivity
Increasing
penetration of
generics
Fewer and
smaller
blockbusters
Current
global
financial
crisis
market de-growth
market de-growth
Decreasing
R&D
productivity
Increasing
penetration of
generics
Fewer and
smaller
blockbusters
Current
global
nancial
crisis
1
2 4
3
Financial crisis 2
Small and biotech pharma companies, which contribute almost 75% of the total R&D pipeline, are most
impacted by the fnancial crisis.
Although the fnancial crisis has had a lower impact on the pharma industry in comparison to other sectors, small biotech
companies have been adversely affected by it. Based on a market study conducted by Ernst &Youngs global biotechnology center,
it is estimated that 44% of US biotech companies have less than a years operating cash, while 26% have less than six months of
operating cash. This is due to decreasing funding from venture capitalists and the inability of small pharma and biotech companies
to launch an IPO in current market conditions. The fnancial crisis will have a negative impact on the already drying product pipeline
for the pharma industry.
Source: Ernst & Young, Beyond borders, Global Biotechnology report, 2008
The fnancial crisis: impacted the consumer spend on healthcare
According to IMS, contrary to the 5.6% CAGR increase in prescriptions from 1997 to 2007, the number of prescriptions flled in the
US dropped by 2% for the frst time in a decade in 200809.
Growth in number of prescriptions lled in US
Source: Ernst & Young, Beyond borders, Global Biotechnology report, 2008
1997 2007 2008-09
5.6% CAGR -2%
Taking wings 24
Increasing genericization driven by the impending
patent cliff due to expiry of key blockbusters and
government pressures to reduce cost of healthcare
market de-growth
Decreasing
R&D
productivity
Increasing
penetration of
generics
Fewer and
smaller
blockbusters
Current
global
financial
crisis
market de-growth
market de-growth
Decreasing
R&D
productivity
Increasing
penetration of
generics
Fewer and
smaller
blockbusters
Current
global
nancial
crisis
1
2 4
3
Generic penetration has increased by 16% in the last decade 3
Source: IMS Health, National Prescription Audit Plus
53 53
49
43
37
47 47
51
57
63
0%
20%
40%
60%
80%
100%
1999 2001 2003 2005 2007
Brands Generics
% of total prescriptions dispensed (in US)
The global generics industry was valued at USD78b in 2008.
The top eight global markets US, Germany, France, UK.,
Canada, Italy, Spain and Japan today account for 84% of
total generics sales.
Sales of more than USD235b are at risk in six years as many
blockbuster drugs go off patent.
Of this, USD~40b worth of drugs are biologics, which are
diffcult to copy, and as a result, have low price erosion post
genericization. Thus, it is an attractive market for players
with biologic capability.
Governments are taking various steps to promote generics to
reduce healthcare costs:
Centralized procurement, e.g., 68% of generic sales in
Germany
Generic substitution, e.g., Japan
Waiving co-payments for patients using generics, e.g., US
Promoting and monitoring physician prescription habits
and is expected to further increase driven by impending patent expiries and measures by governments
to reduce healthcare costs.
Source: EvaluatePharma World Preview 2014, Datamonitor
Sales at risk due to the patent cliff (in USDb)
26
27
58
48
39
37
2009 2010 2011 2012 2013 2014
Source: IMS Health, National Prescription Audit Plus
High healthcare costs as % of GDP
15.3%
11.3%
11.1%
10.6%
10.0%
8.2%
US
Switzerland
France
Germany
Canada
Japan
Fewer blockbuster approvals to replace existing
ones going off-patent to further decelerate
market growth
market de-growth
Decreasing
R&D
productivity
Increasing
penetration of
generics
Fewer and
smaller
blockbusters
Current
global
financial
crisis
market de-growth
market de-growth
Decreasing
R&D
productivity
Increasing
penetration of
generics
Fewer and
smaller
blockbusters
Current
global
nancial
crisis
1
2 4
3
Fewer blockbuster drugs launched 4
One of the other key reasons for the slowdown of the pharmaceutical industry has been the lack of replacements for blockbuster drugs
that have gone off-patent in the past.
Decreasing sales growth of blockbuster drugs
Year 2003 2004 2005 2006 2007
Blockbuster sales growth n/a 24% 14% 10% 9%
Market share 33.1% 36.5% 38.7% 39.7% 39.7%
Pharma market growth% n/a 12% 8% 7% 9%
Source: IMS Health, Business Insight Analysis
It is evident that although the market share of blockbuster drugs is increasing, this increase has slowed down in recent years.
Blockbuster drugs only grew by 9% in 2007 as compared to 24% in 2004.
Reduced sales potential of recently launched drugs
The impact of the industrys dearth of blockbuster approvals in recent years can be seen in the modest sales potential of all the new
drugs approved in 2007 and 2008.
Top 10 NMEs in 2008: ranked on USA Consensus Sales in 2013
Product Company Therapy 2008 2013
1 Treanda Cephalon Oncology 75 544
2 Nucynta J & J Analgesic 0 424
3 Promacta/Revolade GSK Hematology 2 409
4 Pristiq Wyeth CNS 67 372
5 Relistor Wyeth CNS 6 371
6 Lexiscan Astellas CVD 50 296
7 Mozobil Genzyme Oncology 0 275
8 Cimzia UCB I&I 12 249
9 Vimpat UCB CNS 0 237
10 Intelence J & J Anti-infectives 42 215
Note: CVD: cardiovascular diseases, CNS: central nervous system, I&I: immunology and infammation
Source: EvaluatePharma, World Preview 2014; Datamonitor, Company comparator 2009
The projected sales of the top 10 NMEs launched in 2008 show no potential of achieving blockbuster status in the next fve years.
Four of these 10 NMEs have been developed by emerging/biotech pharma (Cephalon, Genzyme, UCB)
Taking wings 26
1.2 The industry is focusing on three key imperatives
to sustain growth:
Investing in new technology platforms
Building a presence in emerging markets
Enhancing effciency in operations
Section 1
Industry facing three key imperatives for creating and
sustaining proftable growth new technology, emerging
markets and enhanced effciency
Imperatives for pharma
Pharmaceutical companies are tackling this slowdown by focusing on new technologies, participating in emerging markets and
increasing their effciency.
Growth
1
2
3
Key imperatives for growth
Focus on new
technologies
E
x
p
a
n
s
i
o
n

i
n

e
m
e
r
g
i
n
g

m
a
r
k
e
t
s
E
n
h
a
n
c
e
d

e
f
c
i
e
n
c
y
Taking wings 28
Key imperatives for growth focus on
new technologies
A presence in biologics, which is making rapid inroads in the global pharma industry, accounting
for an estimated market share of 23% and 50% of the top 100 molecules in 2014
1
Biologics accounted for 17% of the world pharma market in
2008. It also accounted for 42% of preclinical candidates and
26% of submissions the same year. As a result, the share
of biologics is expected to grow to 23% of the world pharma
market in 2014. The fastest growing therapies (oncology
and diabetes) are being driven by biologics. Within biologics,
mAbs, therapeutic proteins and DNA therapeutics are fast-
growing segments.
New technologies required for complex
chemistries:
Lower-temperature technology that can suppress side
reactions and increase reaction selectivity
Chemical decontamination technology for cytotoxics
Research in nanotechnology
Source : EvaluatePharma, World Preview 2014
Share of biologics in top 100 molecules
89%
72%
11%
28%
50%
50%
2000 2008 2014
Conventional Biologics
10%
14%
Absent Emerging Very High
5% -5% -6%
2% 1%
4% 3%
5% -5% -6%
2% 1%
4% 3%
1
Oncology
Immunology
Diabetes
Muscoskeletal
Hematology
Infectious Dis.
Urology
Respiratory
Cardiovascular
Gastrointestinal
Absent Emerging Very high
T
h
e
r
a
p
y

a
r
e
a
s
Monoclonal
Antibodies
Therapeutic
Proteins
Exposure to generics
2
Small
Molecules
M
e

t
o
o

t
a
r
g
e
t
s

I
n
t
e
r
m
e
d
i
a
t
e
N
o
v
e
l

t
a
r
g
e
t
Source : Datamonitor, Future Pharma Trends, 2009
Note :
1.Represents a CAGR 2008-2013
2.Indicates probability of entry of generics in the segment
Growth
1
2 3
Focus on new
technologies
Expansion in
emerging markets
Enhanced efciency
Key imperatives for growth expansion in
emerging markets
Emerging markets are expected to be the key engines of growth for the global
pharmaceutical market
While there has been a slowdown in western pharmaceutical markets, emerging markets, which form 18% of the global
pharmaceutical market, continue to drive its growth, contributing 49% of its total growth in 2009.
2
Source: IMS Health, 2009
Pharma market size (USDb)
311.8
247.5
76.6
90.8
46.5
North
America
Europe Japan Asia/Africa/
Australia
Latin
America
% share in overall absolute growth of global pharmaceutical
market over previous year
57%
12%
13%
49%
0%
20%
40%
60%
2003 2009
North America Emerging Markets*
Source: IMS Health, 2009
Note: * include India , China , South Korea, Brazil, Mexico, Russia and Turkey.
Source: IMS Health 2009
Pharma market growth CAGR % 2003-2008
5.7%
6.4%
2.7%
13.7%
12.7%
North
America
Europe Japan Asia/Africa/
Australia
Latin
America
According to IMS Health, emerging markets outperformed
developed ones in terms of their growth with a CAGR
(2003-2008) of 12-13%, whereas the CAGR of developed
economies remained at around 6-8% for the same period.
Big Pharma is increasing its emerging market focus, as indicated by recent deals being made:
GSK expanded its emerging market footprint by buying Bristol-Myers Squibbs branded generics drugs business in the Middle East
and striking a deal with Indian generic drug-maker Dr Reddys Laboratories, thereby gaining access to a portfolio of 100+ drugs
Sanof-Aventis extended its reach into Eastern Europe and Turkey with its purchase of Zentiva in Czech Republic, and has since
expanded into Latin America with the purchase of Medley in Brazil and Krendrick in Mexico.
Pfzer, the worlds largest drugmaker, signed two licensing deals with India-based companies, adding 128 new off-patent products
to its portfolio
Sources: Company websites, press releases
Growth
1
2 3
Focus on new
technologies
Expansion in
emerging markets
Enhanced efciency
Taking wings 30
Key imperatives for growth enhanced effciency
Increasing operational effciency is essential for sustaining proftability in the long run
Rising pricing pressure, increasing generic competition, ongoing fallout of product safety concerns, thinning pipelines and
looming patent losses have captured the headlines throughout 2007 and 2008.
The industry is responding to some of these issues by restructuring and implementing cost- containment initiatives. Nearly all
the major pharmaceutical frms have announced cost-reduction programs over the past year.
The key initiatives of the top pharmaceutical companies include the following:
3
Company Revenue
1
2008
(USD million)
Est. annual savings
(USD million)
Program term Key initiatives
2
Merck USD23,850 USD3,5004,000 20062010 Headcount reduction (7,200, 12%)
Plant rationalization (5 of 31 facilities)
Novartis USD41,459 USD1,600 20082010 Headcount reduction (2,500, 3%)
Global procurement and sourcing
Plant rationalization and LEAN initiatives
Bristol-Myers
Squibb
USD20,597 USD1,600 20082010 Headcount reduction (4,300, 10%)
Plant rationalization (27 facilities)
GlaxoSmithKline USD39,694 USD1,400 20072010 Improving the selling model
Streamlining global manufacturing
Enhancing R&D effciency
AstraZeneca USD31,601 USD1,400 20072010 Headcount reduction (7,600, 12%)
Strategic procurement
Simplifying business support functions
Pfzer USD48,296 USD4,5005,000 20052008 Headcount reduction (10,000, 10%)
Plant rationalization (48 of the 93 facilities)
Simplifying research and development (R&D)
Johnson
&Johnson
USD63,747 USD1,3001,600 20072008 Headcount reduction (4,800, 4%)
Consolidation of pharma operations
Integration of business model for Cordis
franchise
Sanof Aventis USD38,585 Not disclosed 2009 onwards Headcount reduction (1,300, 1%)
Research site rationalization (27 sites)
Sources:
1. Annual reports
2.Company 4Q07earnings release
Growth
1
2 3
Focus on new
technologies
Expansion in
emerging markets
Enhanced efciency
1.3 Acquisitions and the networked model
have emerged as the key levers being
deployed by the industry to meet these
strategic imperatives.
Section 1
Taking wings 32
Companies increasingly using acquisitions as key
strategy for sustained growth
M&A activities in the pharma and biotech industries have increased over the last three years.
The year 2009 has been the landmark year in this area, with a spate of large ticket acquisitions taking place with the aim to
augment R&D pipelines and achieve cost benefts through synergies in operations.
Big Pharma is making acquisitions within itself, with biotech and generics players satisfying its business imperatives.
M&A activity in the pharma space
Value of transaction No. of deals
M&A activity in the pharma space
112
74
117
79
85
167
226
271
298
284
268
108
0
50
100
150
200
2004 2005 2006 2007 2008 2009 (Till 30 June)
0
100
200
300
400
Value of deals Number of deals
Source: www.mergermarket.com
Key acquisitions by Big Pharma
Type of acquisition Deal Value
Big Pharma Big Pharma
Pfzer Wyeth USD64b
Merck Schering Plough USD43b
Big Pharma biotech
Roche Genentech USD44b
Eli Lilly ImClone USD5.8b
Big Pharma generic
Sanof Aventis Zentiva USD2.9b
Daichii Sankyo Ranbaxy USD5.9b
Source : www.mergermarket.com
and adopting a networked operating model as
a strategy to boost effciencies, and gain access to
technologies and emerging markets
Over the past 20 years, pharmaceutical companies have become increasingly reliant on using third parties to improve effciencies
through in-licensing, out-licensing, collaborations and outsourcing moving toward a networked pharma operating model.
The degree to which companies have embraced the networked pharma model to date varies extensively, with some heavily reliant
on third parties, while others are using third parties to a lesser degree.
A networked model with reliable third parties not only enhances capital effciency but also improves fexibility and the overall cost
structure, maximizes access to novel technologies for increasingly complex molecules, optimizes time to market and releases
internal capacity/resource for core tasks.
Source: Datamonitor

Core tasks
(in-house)
Outsourcing
Responsibility for a function provided to third party
Pharma company sells the rights to a
product or a technology to a third party
Out-licensing
In-licensing Collaborations
Pharma company acquires the
rights to a product or
technology from a third party
Pharma company and
third party play a role in
the project concerned
Taking wings 34
Outsourcing increasingly becoming a strategic decision
for Big Pharma companies
How do pharma companies describe their outsourcing strategy?
Big pharma companies inclination to outsource, as a strategic imperative, has increased signifcantly
over last few years.
According to a survey conducted by Contract Pharma across
more than 200 sponsor-side respondents in 2009, 55%
of global pharma companies regard their outsourcing as a
strategic decision.
Except for responses from emerging bio-pharma companies,
the majority responses from all other types of pharma
companies described outsourcing as a strategic decision.
Further, a comparison of the Contract Pharma Survey results
of 2009, with the same survey conducted in 2006, shows
that 57% of Big Pharma respondents regard their outsourcing
decisions as strategic compared to 42% in 2006.
Source : According to a survey conducted by Contract Pharma across more than
200 sponsor side respondents in 2009
Contract pharma study 2009 (% of respondents)
43%
48%
54%
45%
57%
52%
46%
55%
Big pharma
Small/mid-tier
pharma
Emerging
bio-pharma
Total
Tactical Strategic
58%
43%
42%
57%
2006
2009
Tactical Strategic
Source : According to a survey conducted by Contract Pharma across more than
200 sponsor side respondents in 2009 and 2006
Comparison of Big Pharma responses across two Contract
Pharma surveys
Global outsourcing market, valued at USD51b, 19% of
total R&D and manufacturing spend
The R&D and manufacturing outsourcing market amounts to USD51b in size and represents 19% of the total global pharmaceutical
R&D and manufacturing spend in 2008.
Further, the outsourcing market is growing at a CAGR of 14%.
A recent survey by Contract Pharma in 2009 revealed that 64% of the respondents said that they will continue or increase
outsourcing in 2010 .
Outsourcing is here to stay despite the fnancial crisis and economic slowdown.
*Note: The R&D outsourcing spend above does not include clinical trials
Sources:
1. Goldman Sachs, 2006
2. CMR International 2008 Pharmaceutical R&D Factbook,
3. India Pharmaceuticals In-Depth Global Outsourcing Best Ideas, Morgan Stanley
Report, 2007
4. Ernst & Young analysis
Share of outsourcing in global pharma R&D and manufacturing spend
R&D and
manufacturing
outsourcing
(USD51b)*
Global pharma
R&D and
manufacturing
spend USD264b
Sources:
1. India Pharmaceuticals In-Depth Global Outsourcing Best Ideas, Morgan Stanley
Report, 2007
2. Kalorama Information, Outsourcing in drug discovery, 2008
3. State of the Pharmaceutical Outsourcing Industry, 2007, Jim Miller, President,
PharmSource,
4. Ernst & Young analysis
Global outsourcing spend
44
51
14%
USDb
58
66
0
20
40
60
80
2007 2008 2009P 2010P
Source: According to a survey conducted by Contract Pharma across more than
200 sponsor-side respondents in 2009
Outsourcing spend 2010 estimates
Increase, 39%
No change, 25%
Decrease, 36%
Taking wings 36
Outsourcing taking place across value chain with
API manufacturing constituting large portion of total
outsourcing pie
Outsourcing trends
Utilization of outsourcing across value chain components
Lead molecule
identied
Launch
Discovery
On-patent
growing
On-patent
mature
Discovery
research
Expiry
Research
biology
& chemistry
Pre-
clinc.
Ph
I
Ph
IIb
Ph
III
Ph
IIa
Contract research
There has been a change in
the reasons for outsourcing
and an expansion in the scope
of outsourcing.
Over the past two decades,
there has been a shift in the
pattern of outsourcing of
pharma companies from non-
core functions to routinely
outsourcing a number of
core functions such as
clinical trial management and
manufacturing. Drug discovery
is one of the more recent core
functions to be outsourced.
There is higher prevalence
of outsourcing across the
late lifecycle than at the
early stages.
Outsourcing in API
manufacturing is around
55%, the highest across
the value chain
Utilization of outsourcing
in the discovery and
development space,
as well as in dosage
manufacturing, is low
since they are considered
as core. However, it also
indicates the scope for
future growth.
Extent of outsourcing in each area of the value chain
Source: Frost & Sulivan, 2006
25%
15%
20%
55%
15% 15%
Discovery API dev Dosage
dev
API mfg Dosage
mfg
Packaging
Further, pharma companies
have indicated a preference
for API development and
dosage manufacturing along
with the intention of increasing
outsourcing spends in
these areas
Trend in change of outsourcing spend of pharma companies in 2010 over the previous year
Source : According to a survey conducted by Contract Pharma across more than 200 sponsor side respondents in 2009
48%
41%
38%
48%
15%
17%
22%
15%
37%
42%
40%
37%
API dev.
Dosage dev.
API mfg
Dosage mfg.
Increase No change Decrease
Outsourcing to shift to Asian markets with India and
China being the most attractive destinations
Probability of a project being outsourced to Asia
Around 35% of the total number of pharma companies will
outsource their projects to Asian markets in 2009. However,
only 8% of emerging bio-pharma will outsource projects to Asia
during the same period.
1
Source: 1.According to a survey conducted by Contract Pharma across more than
200 sponsor side respondents in 2009
Source: According to a survey conducted by Contract Pharma across more than
200 sponsor side respondents in 2009, EY analysis
30%
52%
84%
43%
Top pharma
Small/mid-tier
pharma
Emerging
bio-pharma
Total
Yes May or may not No
Trends in outsourcing to Asia
41%
28%
8%
35%
29%
21%
8%
22%
Emerging bio-pharma being slow to come to Asia could be due
to the current credit crunch. Capital constraints have decreased
the risk appetite of such companies. This prevents them from
looking at destinations that have not been tested in the past, in
spite of the cost competitiveness of these destinations.
India and China have been ranked the top two best outsourcing
destinations due to their huge market potential and cost-saving
offered by them.
The need for a continued evolution of the
Innovative Pharmaceuticals Business model,
coupled with the war for technical talent,
has put India at the heart of global sourcing
initiatives. Strong cost competitive and well
developed local industry base, combined
with the large pool of technical talent has
necessitated the inclusion of India as a part
of all global sourcing initiatives across global
pharmaceutical businesses.
Dr. Hasit B. Joshipura
Chairman
GlaxoSmithKline Pharmaceuticals Ltd., India
Taking wings 38
Winds of change blowing in the pharmaceutical
outsourcing landscape
Increasing pressures in the pharmaceutical industry
have resulted in the emergence of the networked
model as companies seek alternative ways to drive
revenue and proft growth. Outsourcing is a core
part of this model and companies are increasing their
reliance on third parties to deliver value across drug
discovery, development and manufacturing, which
have traditionally been considered as core functions.
Over the last three years, Big Pharma has increasingly
shifted the focus of its outsourcing operations from
being tactical to strategic.
The outsourcing industry is undergoing a paradigm
shift with the rise of a number of new players from
emerging economies who offer global capabilities
and a substantial cost advantage. This is forcing
Big Pharma and Western CMOs to introspect and
recognize the need to transition from the West to the
East, to fully leverage the benefts outsourcing can
offer beyond simple cost-savings to strategic benefts.
Taking wings 40
Section 2: Custom manufacturing services
Section 2
2.1 Rationalization of plants due to low capacity utilization, new operating
models for companies and the emergence of biologics are the key factors
driving the growth of the USD33b global custom manufacturing industry,
which is projected to grow at the rate of CAGR of 13% between 2007
2010. The Indian custom manufacturing market is growing at thrice the
rate of the global CMO market with Indian companies looking at expanding
their capabilities to grow from 2.8% in 2007 to 5.5% of the total market
in 2010.
2.2 India scores well on its ability to create a differentiating cost value
proposition, powered by its lower manufacturing costs and manpower and
technical capabilities, but it needs to build/improve on its culture of EHS
compliance, IP protection and infrastructure.
Taking wings 42
2.1 Rationalization of plants due to low capacity
utilization, new operating models for companies
and the emergence of biologics are the key
factors driving the growth of the USD33b
global custom manufacturing industry, which
is projected to grow at the rate of CAGR of
13% between 20072010. The Indian custom
manufacturing market is growing at thrice
the rate of the global CMO market with Indian
companies looking at expanding their capabilities
to grow from 2.8% in 2007 to 5.5% of the total
market in 2010.
Section 2
API and intermediates outsourcing 67% of global
manufacturing outsourcing pie of USD33b with an
estimated CAGR of 13% over 20072010
Global custom manufacturing outsourcing market size, growth and key segments
Lead molecule
identied
Launch
Discovery
On-patent
growing
On-patent
mature
Discovery
research
Expiry
Research
biology
& chemistry
Pre-
Clinc.
Ph
I
Ph
IIb
Ph
III
Ph
IIa
Contract research
Manufacturing outsourcing across pharma value chain
Pharmaceutical manufacturing outsourcing, also known as custom or contract manufacturing, spans the clinical trial phase II b
through till the off-patent stage and includes manufacturing of intermediates, APIs and formulations.
API and intermediates contribute almost 67%
1
of the total outsourcing market.
Source: 1.Boston Analytics, An introduction to the Indian Pharmaceutical Industry An In-depth study of Indias domestic and outsourced pharmaceutical market,
October 2007
Source: Morgan Stanley India Pharmaceuticals In-Depth Global Outsourcing
Best Ideas, July 3 2007
Share of outsourcing in total pharma manufacturing spend
Custom
manufacturing
(USD33b)
Pharma
manufacturing
spend USD135b
Manufacturing
outsourcing account for
24% of total pharma
manufacturing spend
Source: Morgan Stanley India Pharmaceuticals In-Depth Global Outsourcing
Best Ideas, July 3 2007
Global custom manufacturing outsourcing spend
29
33
37
42
0
10
20
30
40
50
2007 2008P 2009P 2010P
USDb
13%
Taking wings 44
Outsourcing of custom manufacturing services affected
by several trends
Closure of assets
Virtual/emerging
bio-pharma/biotech
Biologics
Lack of integrated CMOs
Increasing regulatory costs
Drivers Challenges
Drivers Challenges
Closure of assets : Big Pharma companies have built huge
capacities over the years, and with products moving to their
late lifecycle, these companies are operating plants at only
20 30%
1
of their capacity. As a result, more companies are
looking at divesting such plants and outsourcing and retaining
the marketing rights for the products, thereby reducing their
fxed costs. Acquiring these assets gives CMOs a new business
opportunity and a relationship with Big Pharma.
Virtual/emerging biopharma/biotech : Many of these companies
do not have the internal capacity for manufacturing, and
outsource it, only retaining their marketing rights.
Biologics : As a high percentage of the current pipeline is from
biologics, and the cost of investing in a new manufacturing facility
is high, companies prefer to outsource their manufacturing rather
than invest in a facility.
Lack of integrated CMOs : Pharmaceutical companies
are looking at collaborating with a CMO, which offers
end-to-end services spanning development services to
packaging and managing logistics. However there are only
a few CMOs that are able to provide such services. This is
especially true for western CMOs that are present in either
formulations or API, unlike some large CMOs in India.
Increasing regulatory costs : The cost of complying
with regulations contributes a high percent of the fxed
costs of CMOs. With technological advances taking place
regularly, investments in upgrading facilities, to provide
the requisite expertise to pharmaceutical companies to
sustain business, is essential.
Source: 1.Total European Pharma/Biotech Contract Manufacturing Market , Frost and Sullivan , 2008
Sources:
1.Ernst & Young Analysis , Morgan Stanley India Pharmaceuticals In-Depth Global Outsourcing Best Ideas, July 3 2007
2.Boston Analytics , An introduction to the Indian Pharmaceutical Industry An In-depth study of Indias domestic and outsourced pharmaceutical market, October 2007
Indian custom manufacturing outsourcing market
growing at thrice the global market rate and estimated to
reach USD2.3b in 2010
Indian pharmaceutical manufacturing outsourcing is valued at USD1.1b and is growing at a rate that is thrice that of the global market.
Indian custom manufacturing outsourcing market (USDb)
Source: Morgan Stanley India Pharmaceuticals In-Depth Global Outsourcing Best Ideas, July 3 2007
0.8
1.1
1.6
2.3
0
1
2
3
2007 2008P 2009P 2010P
43%
Indias share of the outsourcing market is estimated to increase from 2.8% in 2007 to 5.5% in 2010.
1
API/Intermediate outsourcing is more prevalent in India than formulation outsourcing. Around 64%
2
of total outsourcing is in the
area of APIs/Intermediates.
Further, most Indian players participate in mid-late lifecycle products and in contributing to the N-2 state of APIs. Indian CMOs do
not participate in the production of the fnal API/formulation sourced for patented product launch/fling for submission.
Taking wings 46
Indian players extending their capabilities to offer wider
portfolio of services
Segments Indian service provider
API and intermediates Dishman, Divis Labs, Dr. Reddys, Hikal, Jubilant, Piramal, Shasun, Syngene
Formulations Dr. Reddys, Emcure, Intas, Jubilant, Piramal, Strides Arcolab , Syngene
Biologics Dr. Reddys, Emcure, Strides Arcolab, Syngene
Source: Company website , Annual Report. Note: The service providers are indicative and not an exhaustive list and are presented in alphabetical order of preference.
Indian players have been taking the inorganic route of mergers and acquisitions to gain access to customers, new geographies
(especially regulated markets) and technology (biologics, sterile injectables , cytotoxics ).
Names of Indian CMOs Acquisitions Capability
Piramal Healthcare Torcan, Avecia, Morpeth API Clinical Trial Supplies (CTS) , Custom
Manufacturing (CM) , fermentation
manufacturing facility
Jubilant Biosys, Trigen, Hollister-Stier, Draxis, PSI supply Formulations, injectables in US
Dishman Carbogen and Amcis, Synprotec Drug development and commercialization in
Switzerland, UK
Shasun Rhodia Custom Synthesis (CS) and CM in France and UK
DRL Roche, BASF, Trigenesis CM in US and Mexico
Strides Arcolabs Diaspa Fermentation manufacturing facility
Note: The deals mentioned are indicative and are not an exhaustive list.
Source: Company website, Annual Report , Mergermarket
2.2 India scores well on its ability to create
a differentiating cost value proposition,
powered by its lower manufacturing costs
and manpower and technical capabilities,
but it needs to build/improve its culture
of EHS compliance, IP protection and
infrastructure.
Section 2
Today, the defnition of a successful CMO is going through a transition. Earlier,
innovator companies saw outsourced services as a transaction, driven by a
combination of speed, cost effectiveness and dependability. Today, outsourced
services are seen in a much more strategic light. Relationships are going beyond
outsourced development to collaborative development. Hence, for an Indian
company to become a successful CMO in the long term, it needs to be trustworthy
as a long term strategic collaborator in development and manufacturing. This
means that if the CMO wishes to be in the early phase development space, it
needs to have strong technical capabilities and be able to deliver quickly as per
commitment. As a competitive player in the late life cycle stages, the CMO needs
to have the ability to continually innovate to improve on cost effciencies. There
needs to be a match in overall attitude and philosophy towards quality, safety,
health and environment, since customers risk taking capacity on these aspects
is constantly diminishing. In summary therefore, to be successful, a CMO needs
to establish strong technical credibility, along with robust management practices
(project management, quality management, SHE practice management, fnancial
management and people management) to ensure proftability and business
viability.
Ajay Piramal
Chairman
Piramal Healthcare Ltd.
The Indian Pharma Outsourcing has
matured signifcantly during the last
decade. The Companies operating in this
space have built excellent capabilities
not only for API manufacturing but
also fnished formulations including
specialized galenic forms such as
cytotoxics, lyophilized injectables,
ophthalmologicals etc thus keeping
pace with global trends and future
needs. India offers a lucrative package
comprising of wide spectrum of
products, signifcant cost advantage,
unmatchable process effciencies and
nimbleness, which are key success
factors for a sound play in Emerging
markets - one of future growth drivers
for most global pharma majors.
Nilesh Wadhwa
Director - In Licensing
Aventis Pharma Ltd., Sanof-Aventis
Group
Taking wings 48
Assurance, quality and service the ticket to play in
the CMO space while cost and innovation serve as
differentiating criteria for selection
Vendor selection is a function of the country and company-level parameters.
T
i
c
k
e
t

t
o

p
l
a
y
D
i
f
f
e
r
e
n
t
i
a
t
i
o
n
Assurance
Quality
Service
Cost
Innovation
Capacity, on time supply, condentiality, sourcing
Culture, EHS, accreditation
Project management, responsiveness
Manufacturing and manpower cost, cost of capital, tax incentives
Technical capability (biologics, cytotoxics, etc. ), skilled manpower
India is the frst place we look for companies with resources, capacity and capability. India business needs to continue to focus on the end to
end business model but work harder to build contacts with stakeholders in Pharma R&D - both API and Formulations.
Senior Executive based in Europe
Global Big Pharma
India story driven by cost value proposition comprising
cost effciency along with skilled manpower and technical
capabilities
This analysis is based on the Ernst & YoungOPPI survey and interviews carried out with 38 respondents across 17 Big Pharma and
medium pharma companies. The respondents were from manufacturing strategy and sourcing teams and senior executives spread
across Europe, US and Asia.
India attractiveness evaluation
Source : Ernst & Young analysis
0% 20% 40% 60% 80% 100%
Tax incentives
Infrastructure
EHS compliance
Proximity to market
IP protection
Regulatory environment
Innovation
Project management
Response time (speed)
Cultural compatibility
Technical capabilities
Skilled manpower
Cost efciency
Poor Below average Average Above average Excellent
P
a
r
a
m
e
t
e
r
s

o
f

e
v
a
l
u
a
t
i
o
n
Areas of strength Areas of improvement
The X axis
represents the % of
respondents
India has been rated as
excellent by 67% of the
respondents on cost efciency
However factors such as tax incentives, infrastructure and EHS compliance are areas of improvement.
Bayer believes in value sourcing rather than low cost sourcing and here we see India as a key country that fts into our strategic sourcing
plans nicely.
K. R. Shekhar
Vice President, Procurement and Logistics
Bayer CropScience Limited
Taking wings 50
Indias cost effciency driven by low manufacturing costs
only 3540% of the cost of manufacturing in the US
Cost efciency attractiveness
0% 20% 40% 60% 80% 100%
Puerto Rico
Eastern Europe
China
India
Ireland
Singapore
India has been rated as
excellent by 67% of the
respondents
Source: Ernst & Young analysis
India rank: 1
Source: Crisinfac, 2007 , Ernst & Young analysis
Overall indexed manufacturing cost ( US FDA approved plant )
0
20
40
60
80
100
US Europe India
Cost index
80-85%
35-40%
100%
On comparing India with some prominent manufacturing locations, it is seen that India rates higher on cost effciency than all the other
countries. This has been possible due to the intrinsic nature of the Indian pharmaceutical Industry and its evolution. The three key
factors that contribute to this effciency include:
Source: 1.Drugs and Pharmaceuticals for the Eleventh Five Year Plan , Planning Commission of India, December 2006
Manufacturing costs 1. : The Indian market is highly
fragmented with almost 8000
1
manufacturers. This high
competition has driven Indian companies to relentlessly
drive their costs down over the life cycle of a product.
The competency developed as a result also refects in the
manufacturing costs of US FDA plants in India, whose costs
are 65% lower than that in the US and 50% lower than that
in Europe.
supported by low installation and manpower costs
2. Installation costs: The cost of setting up a plant in India is
30% lower than that of establishing an FDA plant in the US.
3. Manpower costs: Indias pool of trained chemists and
pharmacists is six times as large as the USAs and is
available at less than 1/10
th
the cost.
Source: CRISINFAC/ Motilal Oswal Securities Report, 2006
Relative indexed cost of skilled chemists
7
70
100
95
0
20
40
60
80
100
US Germany Italy India
Cost index
Source: Enam CRAM sector report, March 2007
Installation cost US vs India
Cost index
70
100
0
20
40
60
80
100
US India
India plays a key role in the Best Cost Country Sourcing Strategy of Bayer
Health Care. India is seen as a reliable partner for the more advanced
products whereas China is seen as a supplier for early intermediates and
less value adding processes.
Ingrid Reinkober
Vice President
Global Procurement Raw Materials & Intermediates
Bayer HealthCare AG Leverkusen, Germany
The Indian market has become a major player for API sourcing. The key
strengths lies in its ability to provide low cost APIs (mainly mature APIs)
to an appropriate standard combined with an well improved manufacturing
and development capability which differentiate themselves from other low
cost countries.
The areas for improvement are Supply chain management with lean
focus combined with a greater ability to through out a product lifecycle
continuously improve the manufacturing process to drive down the total
cost of goods, whilst still maintaining the low cost base.
Nicklas Westerholm
Director of API Supply, Global External Sourcing
AstraZeneca
Taking wings 52
and offering large pool of skilled manpower
Skilled manpower attractiveness
0% 20% 40% 60% 80% 100%
Puerto Rico
Eastern Europe
China
India
Ireland
Singapore
Poor Below average average Above average Excellent
Around 58% of the
respondents rated India
as excellent
India is rated as the country with the highest skilled manpower for custom manufacturing. One of the reasons for this is the large
number of students who qualify every year, giving companies an abundant pool from which to choose. For example, of the total
number of post graduate students qualifying every year, almost 37.5%
1
have chemistry as their specialization.
Source: University development in India, basic facts and gures, University
Grant Commission, Government of India; NCAERs National Science Survey
2004; Ernst & Young analysis; Changing trends in Pharmacy Profession,
Express Pharma, Industry sources
Annual supply of talent in India
1,600,000
653,000
400,000
50,000
Science
Graduate
Engineering
Graduates
Post
Graduate
Pharmacist
This large talent pool qualifes from almost 7000
institutes which are approved by the All India Council for
Technical Education ( AICTE ), which offer both degree
and engineering courses. Almost 9% of these offer
pharmacy courses. In addition, there are around 300
college -level educational and training institutes offering
degrees or diplomas in biotechnology, bioinformatics
and biological sciences, and produce almost 50,000
qualifed professionals annually
2
.
Sources:
1.CII, Ernst & Young analysis ,
2.Report of the Working Group for the Eleventh Five Year Plan , Department of Biotechnology, Ministry of Science and Technology
India rank: 1
... who exhibit a high level of cultural compatibility with
customers across the world
Cultural compatibility attractiveness
0% 20% 40% 60% 80% 100%
Puerto Rico
Eastern Europe
China
India
Ireland
Singapore
Around 58% of the
respondents rated India as
above average and 17%
as excellent
Not only is there a large pool of qualifed professionals, but English is widely used in higher education, business and medicine-making.
India is the second-largest English-speaking country in the world after the US .
India has positioned itself as one of the leading global pharmaceutical players. It not only offers lower cost manufacturing solutions, but
innovation through R&D. Process development, drug discovery support services, chemical synthesis and clinical trials are some of the
areas which are being outsourced by global pharmaceutical companies. Custom manufacturing of APIs and intermediates presents the
biggest opportunity for Indian companies in the CRAMs sector. India now has the highest number of FDA approved plants outside the US.
High costs, margin and pricing pressures faced by global pharma companies can be mitigated by outsourcing their manufacturing to India.
Indian companies which maintain global quality, intellectual property and environment, health and safety standards could become preferred
suppliers to Big Pharma companies. That being said, India is emerging as the preferred destination and a hub for outsourcing across the
entire value chain from drug discovery to drug product manufacturing
Sameer Hiremath
Deputy Managing Director
Hikal Ltd.
India rank: 3
Taking wings 54
Indias forte its technical capability
India is ranked the highest in terms of technical capability with almost all the respondents rating it as Above average or Excellent.
The key reason for its strong technical capability is its strong manufacturing base.
Currently India accounts for 8% of global pharmaceutical production, making it the worlds fourth-largest pharmaceutical producer
1
.
Its prowess is in API, where it is the third-largest player worldwide with 500 different APIs, and in formulations where it manufactures
60,000 packs across 60 therapy areas.
2
Technical capability attractiveness
0% 20% 40% 60% 80% 100%
Singapore
Eastern Europe
China
Puerto Rico
India
Ireland
Amost all the respondents
have rated India as either
above average(83%) or
excellent(8%)
India rank: 1
USFDA-approved plants
Source: Indian Pharma CRAMS, July 2008
Note: * Ministry of Commerce and Industry, Department of Commerce, Govern-
ment of India - Strategy for Increasing Exports

119
55
27
25
10
8
5
0
40
80
120
India Italy China Spain Taiwan Israel Hungary
India has the highest number of US FDA approved
plants outside the US
India has the around 119 USFDA
3
plants in addition to around
84
4
UK MHRA approved plants Many of these plants also have
approvals from countries such as Canada, Australia, Germany
and South Africa. These approved sites aptly demonstrate the
ability of Indian companies to deliver quality products worldwide
and act as a platform for CRAMs players.
Sources:
1.Report of the Working Group on Drugs and Pharmaceutical s for the Eleventh Five Year Plan (2007 2012)Planning Commission Report, Planning commission
of India
2.Strategy for increasing exports of pharmaceutical products , Department of Commerce GOI , December 2008
3.Ministry of Commerce and Industry, Department of Commerce, Government of India - Strategy for Increasing Exports of Pharmaceutical Products, December 12, 2008
4.UK MHRA , March 2008
Most large Indian pharma companies are vertically integrated.
In India, companies have adopted a vertically integrated model
to become more competitive in the price-competitive Indian
market.This advantage has been leveraged by some leading
outsourcing players who offer end-to-end services across
development and manufacturing in formulations and APIs,
unlike western CMOs which generally have a presence in either
formulations or APIs, but not in both.
refected in large number of flings in the US and
increasing exports
India accounts for one-third of the DMFs in the US and has fled the largest number of ANDAs from any other country apart from
the US.
Indian companies have been active in fling DMFs in the US since 2000 and had a 36% share of the total flings in 2007. Between 2000
and 2007, India fled 1,155 DMFs with the US FDA, a much larger number as compared to countries such as China, Italy and Japan
during the same period.
Cumulative DMF lings
Source: Reliance Money, Indian Pharma CRAMS, The Imminent CRAMs opportunity
51
329
1155
268
142 131
10%
8%
34%
4% 4%
2%
0
200
400
600
800
1000
1200
1400
India China Italy Japan Spain France Mexico
0%
5%
10%
15%
20%
25%
30%
35%
40%
DMF lings
DMF lings % share
% Share in total DMF ling
66 1.5%
Indias share in total ANDA approvals
Source: Reliance Money, Business Standard, March 6 2009
14
0
20
40
60
80
100
120
140
160
2001 2002 2003 2004 2005 2006 2007 2008
0%
5%
10%
15%
20%
25%
30%
35%
Total ANDA approvals % share
136
125
72
49
26 24 21
ANDA lings % share
6%
7% 7%
9%
14%
20%
27%
30%
Filing such a large number of DMFs and ANDAs has also helped India to develop technology transfer capabilities essential for custom
manufacturing players.
Resulting in a growth of exports by 24% over 20042008
Further, rising exports in formulations and bulk drug production, especially to regulated markets, indicate the high quality of
manufacturing capabilities in India.
Exports of formulations and bulk drugs
Source: Strategy for Increasing Exports of Pharmaceutical Products,
Report of the Task Force, December 2008, Ernst & Young analysis
1.6
4.1
1.6
3.3
0
2
4
6
8
2004 2008
Formulations API
USDb
C
A
G
R

2
0

%
C
A
G
R

2
6

%
Country name Export share%
USA 19.1
Germany 4.7
Russia 4.7
UK 3.7
China 2.8
Brazil 2.6
Canada 2.5
South Africa 2.2
Nigeria 2.2
Spain 1.7
Taking wings 56
Continuous building of capabilities by Indian companies
in emerging areas with support from the government
Increasing capability in bio-similars
Currently, India has 200 companies working in the area of
biotechnology with an emphasis on vaccines and bio-services.
There are over a 100 national research centers in the country
that support these activities.
India has identifed the need to augment its capabilities in oncology and biologics
Oncology is the largest and one of the fastest growing therapy areas in the country and also has the highest number of active INDs;
biologics is not far behind and has the third-highest number of active INDs present in the pipeline. India has nascent capability in these
areas currently since they require higher investment and highly specialized technology.
and has taken several initiatives to build its capabilities in this area.
Segment Potential (2010)
1
Biopharmaceuticals USD2b
Bio-services
outsourced research services)
USD1b
Governmental measures
1
The government is in the process of setting up fve biotechnology parks in India to promote upcoming biotech companies.
1
The Department of Biotechnology has set up 35 facilities between 20022007 to produce and supply biologicals, reagents,
culture collections and experimental animals to scientists, industries and students at a nominal cost.
2
A National Biotechnology Regulatory Authority will be set up to provide a single window clearance mechanism for all
biotechnology products.
International collaboration to assist in the transfer of knowledge between various countries is on the anvil. India has tied up with
Denmark, Finland, France, UK, US, Switzerland and the Netherlands to achieve this.
Enabling public institutions to work with the industry: Public-funded R&D companies will be allowed to set up not for proft
companies to facilitate collaboration with the industry. Scientists can pursue innovative projects for a defned period on a user
charge basis, providing access to centralized equipment and scientifc consultation.
Sources:
1.Department of Biotechnology
2.Report on the working group for the Eleventh Five Year Plan ( 2007 2012 ) Department of Biotechnology
Indias proximity to emerging markets likely to impact
its current ratings positively
Proximity to market attractiveness
0% 20% 40% 60% 80% 100%
Puerto Rico
Singapore
China
India
Ireland
Eastern Europe
Around 27% of the
respondents have rated
India as above average;
55% have rated it as average
According to the survey, countries that are in the western hemisphere rate higher than Asian countries in terms of their proximity to
market. This is due to the fact that western countries contribute almost 72%
1
of the global market today.
However, according to IMS estimates, the growth in the North American and European markets will slow down to -12%
1
and 3-6%
1
,
respectively, over 20082013 period. On the other hand, Asia, Africa and Australia will grow at the rate of 1114%
1
. This market
is playing an increasingly big role in Big Pharma strategy and is therefore expected to increase the proximity to market rating
for India.
Potential growth by region
Source: Ernst & Young analysis, IMS Health Prognosis March 2009
Note : The growth has been calculated based on the best case IMS estimates of CAGR by region over 2008-13
6 6 6 7 7
15 16
17 18
19
13 14
17
19
21
3
3 3
3
4
7 7 8
10 11
0%
20%
40%
60%
80%
100%
2009 2010 2011 2012 2013
North America Europe Asia/Africa/Australia Japan Latin America
Asia/Africa/Australia has the
highest share of the market growth
Growth in Asia/Africa/Australia
is three times that of the US in
absolute terms
Source: 1.IMS Health Market Prognosis, March 2009, Ernst & Young analysis
Taking wings 58
Shifting of clinical trials to emerging markets likely to
positively impact Indias ranking in clinical trial supply
outsourcing
More clinical trials moving to emerging markets will increase Indias proximity to the market
especially in the case of Phase III trials, where India is growing almost seven times the global average of 5% CAGR between 2004-2008
Growth in clinical trial studies (CAGR: 20042008) trends in clinical trial globalization
Source: Tufts CSDD analysis of BMIS Source: www.clinicaltrials.gov
86
80
77
70
62
57
9
9
10
11
13
14
12 13
19
25
29
5
0%
25%
50%
75%
100%
1997 1999 2001 2003 2005 2007
US Western Europe Rest of world
40% 39% 38% 31% 28% 24% 23% 18% 17% 17% 10% 14%
K
o
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e
a
C
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i
n
a
R
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n
d
i
a
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p
p
i
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e
s
H
u
n
g
a
r
y
R
u
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s
i
a
P
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B
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a
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i
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T
a
i
w
a
n
A
u
s
t
r
a
l
i
a
G
l
o
b
a
l
No. of Phase III trials started in 2008
Source: www.clinicaltrials.gov
CAGR
2004 to 2008
35% 39% 22% 24% 20% 14% 39% 22% 45% 28% 12%
0
20
40
60
80
100
120
140
160
P
o
l
a
n
d
A
u
s
t
r
a
l
i
a
R
u
s
s
i
a
I
n
d
i
a
B
r
a
z
i
l
H
u
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g
a
r
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o
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e
a
R
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a
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i
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C
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i
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a
P
h
i
l
i
p
p
i
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e
s
Indias improved project management capabilities and
responsiveness to customer requirements
Response time attractiveness
0% 20% 40% 60% 80% 100%
Puerto Rico
Eastern Europe
China
India
Ireland
Singapore
Around 67% of the
India as above average
or better
Although most respondents have rated India as above average on both these parameters, it is still rated behind Singapore and Ireland.
One of the keys to improve responsiveness and project management is to ensure a reliable supply of raw materials.
Project management attractiveness
0% 20% 40% 60% 80% 100%
Puerto Rico
Eastern Europe
China
India
Ireland
Singapore
Around 67% of the
India as above average
or excellent.
India rank: 3
India rank: 3
This requires a strategic perspective toward sourcing of raw material rather than a tactical approach. Indian companies are looking at
identifying multiple vendors for critical raw materials, to conduct vendor audits and establish a long-term relationship with selected
vendors to assure their customers about supplies.
In terms of strengths, I can think of the fact that India does have a strong pool of talent in the project management function courtesy the
highly successful service industry that exists in the nation. CRAMS is a service industry where the products we sell are only incidental
These are aspects in which many companies need to move several steps towards attaining maturity
Project management still needs recognition as a separate line function and it cannot be a time share for R&D folks. 1.
While it is a science and technology oriented business, leaving project management with R&D which as a function has too much emotional 2.
attachment to the science leads to risk of loosing business focus
Project management as earlier mentioned needs to be recognized as a full time line function and it needs autonomy by means of a direct 3.
top management sponsorship. It needs to function almost like QA when it comes to autonomy lest the organization looses the customer
focus
Project management is a techno commercial role at best and NOT a technical role 4.
Much needs to be done in terms of attaining cross industry learning from an industry like IT where India has excelled in the recent past. 5.
Project management operates exactly to the above principles
Senior Executive,
Large Indian Service Provider
Taking wings 60
Global CMOs attracted to set up bases or collaborate
with Indian companies
These capabilities have attracted western CMOs to work in India.
Lonza is planning to set up a base in India with an investment of USD150m in Hyderabad, which will be engaged in
biopharmaceutical manufacturing.
1

Patheon has a strategic tie-up with Kemwell (a provider of formulation contracts, manufacturing and development services in
India). The alliance will enable both Patheon and Kemwell to market each others services to their clients.
2

Albany Molecular Research Institute (AMRI) has followed up its push into new markets for its drug discovery operations by acquiring
the assets of Ariane Orgachem & Ferico Laboratories.
2
Sources
1.Fierce Biotech, 22 May 2009,
2.Outsourcing-pharma.com
In spite of cost value proposition offered by Indian
companies, IP risk perception limiting growth
Sources:
1.India: Ministry of Commerce and Industry, Strategy for Increasing exports of pharmaceutical products December 2008
2.India: Data Exclusivity, Anand and Anand
IP protection attractiveness
0% 20% 40% 60% 80% 100%
Puerto Rico
Eastern Europe
China
India
Ireland
Singapore
Around 33% of the
67% have rated it as
average
Outsourcing players still perceive IP risk in India
According to the survey, India is rated ffth in terms of perception of IP protection.While, it has implemented the WHO TRIPS patent
regime, companies still perceive a risk on protection of their IP in the country. As a result, many companies are still reluctant to
outsource certain parts of their value chain to India, especially in the area of formulations of patented products in the growth phase.
In its Special 301 Submission for 2009, Pharmaceutical Research and Manufacturers of America (PhRMA) recommended that India
remains a Priority Watch List country and that the US Government conducts an Out-of-Cycle Review of the deteriorating IP regime in
the country.
Key areas of concern: data protection and exclusivity
1,2
Currently there are no provisions in Indian laws regarding whether the data collected from clinical trials can be used by the Drug
Controller General of India ( DCGI ) in its approval procedures for other drugs. The data protection law will ensure that although the
government can approve a generic drug that can claim bioequivalence by using this data, it cannot disclose this data to any third
party. The concern of the innovator companies is that in the absence of such a law, the data they provide may be shared with other
companies, leading to its commercial usage by other companies.
In addition, there is a debate whether data exclusivity laws need to be enacted in India . Data exclusivity laws would ensure that the
regulatory authority will not be permitted to use the data submitted during clinical trials to approve a generic drug till the end of this
exclusivity period. This may result in the protection of the innovator product for a period over its 20-year patent life. For example, if
a product is introduced in the market in the 18
th
of its 20-year patent life, and if the country has a fve-year data exclusivity law, this
would effectively extend patent protection to 23 years.
Taking wings 62
Launch of patented products in India an indication of
waning IP risk
Although there are concerns on data protection and data exclusivity, companies have launched on
patent products in Indian markets, which shows that IP risk perception about the country might
be waning.
Company name On-patent brands launched in India
Pfzer Vfend, Viagra, Lyrica, Caduet, Genotropin, Macugen, Champix
GSK Windia, Coreg, Arixtra, Flutivate E , Boostrix, Infranix, Tykerb
Roche Tamifu, Avastin, Tarceva, Pegasys
Sanof Aventis Aprovel, Stilnox
MSD Lescol XL, Lucentis
Novartis Gardasil, Januvia
Source: CrisInfac, Ernst & Young analysis
Different models adopted by Indian players to mitigate
risk perception
The IP risk perception for Big Pharma is increasing due to the Para IV fling strategy of Indian generic players. As a result, Big Pharma
is reluctant to outsource products under patent to Indian companies that have a Para IV fling generic strategy.
Indian players use different strategies to mitigate the perception of Big Pharma:
Companies have clearly defned their generic policy of not fling Para IV products and have a non-competing policy with the Big
Pharma, e.g., Piramal Healthcare.
Companies that only work in the API space and have not entered the formulations space, e.g., Divis Labs and
Dishman Pharmaceuticals.
Companies interested in generics have also established separate organizations that are independent from the parent organization,
to prevent any confict of interests, e.g., Biocon-Syngene.
Companies fle Para IV but work predominantly with biotech companies in the US and Europe for whom the risk of Para IV fling is
low, e.g., Dr Reddys Labs.
Taking wings 64
Need for India to improve regulatory timelines
Regulatory environment attractiveness
0% 20% 40% 60% 80% 100%
Puerto Rico
Eastern Europe
China
India
Ireland
Singapore
Around 9% of the
India as excellent while
above average
India fares better than Eastern Europe and China in terms of the regulatory environment, but it is an area of improvement as
compared to western countries.India has regulatory approvals and processes which take anywhere from 812 weeks and involves
import licenses (NOC from DCGI), manufacturing licenses, a Certifcate of a Pharmaceutical Product (CoPP) and a Certifcate of
Origin (CoI).
However, initiatives are in progress to change the regulatory scenario in India. One of these initiatives has been the move from the
decentralized approach to drug control to a single Central Drug Authority (CDA)* on the lines of the US FDA.
Source: CDSCO
Current regulatory scenario
Central authorities State authorities
Five years to transition completely
Central authority
Future scenario
Laying down standards for drugs, cosmetics,
diagnostics and devices
Regulating market authorizations
Regulating clinical research
Regulating standards of drug imports
Testing of drugs by central labs
Monitoring adverse drug reactions
Approving licenses to manufacture
parenterals and vaccines
Licensing of drug manufacturing and sales
establishments
Approving drug formulations for
manufacture
Monitoring quality of drugs and cosmetics
manufactured in a particular state and sold
in that state
Investigating and prosecuting contravention
of legal provisions
Recalling substandard drugs
Conducting pre- and post- licensing
inspection
Modeling autonomous on lines of the US FDA
Separating divisions for regulatory oversight
of clinical trials, new drugs, medical devices,
GMP, DCGI
Granting manufacturing licenses
Note: * Bill under consideration in Parliament
A number of initiatives being taken to improve the
effciency and speed of the regulatory process and
the infrastructure
Some of the other steps being taken, which will help to improve the regulatory environment, are listed as in table below.
Initiative Measures by the government
Streamlining and reducing timeframe for approvals
Implementation of the Common Technical Document (CTD )format
for biological and qualifcation of National Regulatory Authority (NRA)
assessment by WHO and introduction of CTD format for New Chemical
Entity (NCE)
1
Single window clearance for all approvals from regulators currently, six
departments are involved at various stages of the approval cycle.
1
The DCGI proposes to have a fast track process for license applications for
SEZ-based units, which either have a NCE under clinical development or a
molecule under patent for which a value addition is required.
3
As part of this process, in the case of exports of services, a separate NOC
manufacture and NOC export might not be needed.
In the case of export of physical material, if both NOC manufacture
and export are submitted, the timelines for granting the licenses are
proposed to be two weeks ( 10 working days ).
3
Recruitment drive to increase manpower (200 drug inspectors
4
) and shift to
new location to improve operations to meet timelines
1
e-Governance initiatives under progress to include online submission
of all forms, a digitized interactive portal, digitalization of records and
online approvals
1
Only the central drug authority will have the right to issue the export quality
Certifcate of Pharmaceutical Product (COPP). This will be issued in the WHO
GMP format
2
and will help to remove the inconsistencies seen in the COPPs
earlier awarded by different state authorities.
Infrastructure support
A separate dedicated temperature and atmosphere-controlled area to
maintain the safety, effcacy and quality of imported and export drugs/
pharma products at airporst and sea ports, known as Pharmazones this
facility will be in line with product requirements and GMP compliance and
will also have a mini-lab, e.g., the international airports at Delhi, Hyderabad
and Mumbai.
Sources:
1.CDSCO Initiatives 2008-12
2.Is India evolving to support global drug development ? Anthony Woodman and Suresh Gupta
3.DCGI
4.Business Line , Drug regulator to get more inspectors , 19 July 2009
We are streamlining the regulatory approval pathway to facilitate development of New Chemical Entities (NCE) to make India a global
destination for drug discovery & development.
Dr. Surinder Singh
Drug Controller General of India
Ministry of Health and Family Welfare
Taking wings 66
Focus on regulatory capability building and enhancement
of EHS compliance culture
Initiative Measures by the government
Capability building
MOU with USFDA
Collaboration in clinical practices, biological drugs, pharmacovigilance, medical devices, IT
MOUs with WHO, Health Canada, ANVISA, South Africa, EMEA
Setting up of US FDA offce in India
Training and workshops with USFDA on GCP, clinical research inspection, pharmacovigilance
Proposal to set up a national biotechnology regulatory authority
Source: Is India evolving to support global drug development ? Anthony Woodman and Suresh Gupta
EHS compliance attractiveness
0% 20% 40% 60% 80% 100%
Puerto Rico
Eastern Europe
China
India
Ireland
Singapore
Around 17% of the
average
According to the respondents, only 17% of them perceive that EHS standards in India are above average.
The Ministry of Chemical and Fertilizers has created an Environment Cell to improve the standards of EHS in India Department of
Pharmaceuticals ( DOP). The primary objective of the cell will be to collect knowledge and compile data on the latest technologies
available for effuent treatment and disaster management and disseminate information in the pharmaceutical industry.
1
Source: 1.Is India evolving to support global drug development ? Anthony Woodman and Suresh Gupta
Government taking steps to enhance capacity and
capability to support physical infrastructure
Infrastructure attractiveness
0% 20% 40% 60% 80% 100%
Puerto Rico
Eastern Europe
China
India
Ireland
Singapore
Around 17% of the
average
To tap this opportunity, India will need to augment its infrastructure. It is currently ranked as the lowest among these six countries in
terms of infrastructure.
Particulars US UK India China
Electric consumption per capita (KwH) 14,240 6,756 618 1,684
Steel consumption per capita (Kg) 357 195 34 244
Rail route per mn people (Km) 755 276 56 57
Cargo handled at ports per capita (Kg) 7,953 9,733 572 4,265
No. of passengers handled at airports
per 1,000 persons
4,780 3,517 71 151
Source: Published media, Global Research
The government is responding by increasing its outlay for infrastructure development.
With a view to accelerate infrastructure development in the country, the Government of India has planned an estimated capital outlay
of USD530b* over the 11
th
Five Year Plan. This will constitute 9.2% of its GDP by 201112 as against 5.6 in 2006 07.
Investment in infrastructure sector
in 10
th
& 11
th
plan (USDb)
Infrastructure spending as % of GDP
Source: Planning commission, Global research Source: Planning commission, Global research
171%
195
530
10
th
plan
2002-03 to 2006-07 2007-08 to 2011-12
11
th
plan
9.2%
8.1%
7.2%
6.5%
5.9%
5.6%
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Note * : INR45 = USD1
Taking wings 68
and setting up special economic zones to improve the
fscal benefts provided to companies
Tax incentive attractiveness
0% 20% 40% 60% 80% 100%
Eastern Europe
China
India
Singapore
Only 11% of the
respondents felt that
India offered above
average tax incentives
Puerto Rico
Ireland
Although Indian companies are highly cost competitive, some of this advantage is offset by the tax incentives provided to companies in
the country as compared to other countries. This is especially true for the high corporate tax levied on Indian companies.
Big pharma companies have been optimizing their tax benefts by sourcing APIs and intermediates from emerging markets such as
India and China till the N-2 stage and then moving the fnal production of APIs and/or formulations to countries such as Puerto Rico
and Ireland. To negate this, CMOs in India have set up operations in Special Economic Zones ( SEZs ), which provide direct and indirect
tax incentives.
Countries Corporate Income Tax rate
Ireland 12.5%
1
Puerto Rico 4%
1b
Singapore 18%
1
China (Peoples Republic of China) 25%
1
Eastern Europe (Poland, Romania, Hungary) 1619%
1
India 33.99%
1*
SEZ advantages in India
Direct tax 15-year tax holiday with 100% for fve years, 50% for the next fve years, 50%
a
for the last fve years
Indirect tax
Custom duty exemption on goods imported for authorized operations in SEZs and exported to any place
outside India
Exemption from service tax on taxable services procured by SEZ developer for authorized operations
Note [a] Subject to the extent of profts ploughed back and transferred to SEZ Re-investment Reserve Account to be utilized for the purpose of capacity expansion
Source: 1.Ernst & Young, 2009 Worldwide Tax Guide. The tax rates are for an indicative purpose only
Note [*] Includes education cess and surcharge
Note [b] Flat tax on IDI derived by companies that obtain exemption grants tax rates differ depending on zone of development
Big Pharma using India as an offshore and outsourced
location due to these factors
Sponsors
MNC pharma Big Pharma, medium and small pharma and biotech
Offshoring Outsourcing
Traditionally, India has been considered an ideal geography for sourcing of APIs/intermediates and formulations for generic and off-
patent products. However, in recent years, both Big Pharma and biotech companies have increasingly moved toward sourcing APIs/
intermediates and formulations across the pharma life cycle from India. Big Pharma companies such as Pfzer, GSK, Eli Lilly, BMS and
AstraZeneca have mainly adopted the outsourcing route. However, there are instances such as Nycomed and Zydus Cadila that have
established partnerships.
Company Offshoring Outsourced
Pfzer
Eli Lilly
AstraZeneca
Novartis
Sanof Aventis
GSK
Wyeth
Schering Plough
Abbott
Merck
BMS
Nycomed
Solvay
Allergan
Source: Annual reports, Ernst & Young analysis
Company APIs and
intermediates
Formulations
Pfzer
Eli Lilly
AstraZeneca
Novartis
GSK
Merck
Nycomed
Allergan
Solvay
Source: Annual reports, Ernst & Young analysis
Note : Offshoring defnes that the company uses India as a base for other markets and is a substantial part of its exports as available in the Annual Report.
Taking wings 70
India well poised to become strategic partner of choice
in arena of contract manufacturing due to its cost
value proposition
Although India is already established as a low-cost
manufacturing base with signifcant technical and manpower
capability driving its growth, it is important to realize that
countries such as China are also investing in capability and
will pose a threat to Indias position in the medium/long term.
Infrastructure, a culture of quality and EHS and niche technology
capabilities, e.g., biologics, cytotoxics and lyophilization, are
areas India needs to immediately ramp-up to stay ahead of the
curve and assume the leadership position, thereby transitioning
from a vendor of choice to a strategic partner.
Improve EHS standards
Shorten regulatory
timelines
Change perception about IP
protection in India
Enhance cytotoxic and
lyophilization capabilities
Instill quality culture
Time period
Create better infrastructure
Build capability in biologics
Short medium (<3 years) Medium long (36 years)
We need to understand that it is not enough to have advantages of
1. Infrastructure (USFDA approved plants)
2. Cost
We need to have a mindset of quality both in results and in process.
Deepak Naik
Managing Director,
Eisai, India
India has made tremendous progress of the past 10 years as a key component of the Pharma supply
chain in terms of Plant, Infrastructure, technical competence, Quality and EHS capability. However this
has introduced greater complexity and potential risk to the supply chain from a European and American
perspective. To address this, the next key challenge facing India over the next few years is the need to
focus on Logistics, transport infrastructure and supply chain management. - it goes without saying that
this needs to be achieved without India losing its competitive edge.
Senior Executive based in Europe
Global Big Pharma
Taking wings 72
Section 3: Drug discovery and development services
Section 3
3.1 The global drug discovery and development market is valued at USD49b.
The outsourcing market is valued at USD18b, i.e., ~37% of the total pie, and
is growing at 17% p.a. India is emerging as a hot spot n drug discovery and
development outsourcing, growing at ~ 65%, i.e., at more than three-and-
half times the global growth rate.
3.2 Indias pharmaceutical outsourcing landscape is well positioned to provide
services in the area of late stage discovery (research chemistry) and drug
development services. The country has recognised the need to develop
its early stage discovery (research biology) capabilities and has begun
investing in this area.
Taking wings 74
3.1 The global drug discovery and development
market is valued at USD49b. The outsourcing
market is valued at USD18b, i.e. ~37% of the
total pie, and is growing at 17% p.a. In drug
discovery and development outsourcing, India
is emerging as a hot spot, growing at ~ 65%,
i.e., more than three-and-half times the global
growth rate.
Section 3
Drug discovery and development outsourcing contract
research spanning target identifcation through lead
optimization and clinical Phase Trial IIa
Lead molecule
identied
Launch
Discovery
On-patent
growing
On-patent
mature
Discovery
research
Expiry
Research
biology
& chemistry
Pre-
Clinc.
Ph
I
Ph
IIb
Ph
III
Ph
IIa
Contract research
Drug discovery and development outsourcing across pharma value chain
Drug discovery and development outsourcing, also known as contract research, spans target
identifcation and lead optimization to Clinical Trial IIa.
Research biology Research chemistry
Pre-clinical to clinical trial
Phase II a
Drug discovery Drug development
Target
identication
Target validation
Compound generation,
Lead identication
Screening
Lead optimization
Analytical method
development and validation
Process chemistry
development
Solubility, stability and
other studies
Scaling up from micrograms
to grams and kilograms
Clinical APIs and
formulation manufacturing
ADME, toxicology,
in vitro in-vivo PK
Pre-formulation and
formulation development
Taking wings 76
Global drug discovery and development outsourcing
market valued at USD18b and growing at 17% annually
Share of outsourcing in global pharma R&D spend
Out-
sourced
USD18b
Drug discovery
and development
USD49b*
Global pharma
R&D spend
USD129b
Drug discovery and
development accounts
for 38% of total R&D
~ 37% of total drug
discovery and
development is
outsourced
*Note: excluding clinical trials
Source:
Goldman Sachs, 2006
CMR International 2008 Pharmaceutical R&D Factbook
Ernst and Young analysis
Global drug discovery and development outsourcing market size and growth
Indias drug discovery and development outsourcing market is valued at USD0.6b and is growing at ~65% p.a.
The Indian drug discovery and development outsourcing market size and growth
Global drug discovery and development outsourcing market
size and growth
Source:
India Pharmaceuticals In-Depth Global Outsourcing Best Ideas,
Morgan Stanley report, 2007
Kalorama Information, Outsourcing in drug discovery, 2008
State of the Pharmaceutical Outsourcing Industry, 2007, Jim Miller,
President, PharmSource
Ernst & Young analysis
5
6
7
8
10
17%
14
12
17
0
5
10
15
20
25
2007 2008 2009P 2010P
Drug discovery Development
*Note: excluding clinical trials
Source: India Pharmaceuticals In-Depth Global Outsourcing Best Ideas,
Morgan Stanley Report, 2007, Ernst & Young analysis
Indias share in global drug discovery and development
outsourcing market
India
(USD0.6b)*
Global drug
discovery and
development
outsourcing
market USD18b
India accounts for ~3% of
global drug discovery and
development outsourcing
Indian drug discovery and development outsourcing market
size and growth
Source: : India Pharmaceuticals In-Depth Global Outsourcing Best Ideas,
Morgan Stanley Report, 2007, Ernst & Young analysis
65%
0.3
0.6
0.9
1.5
0
0.5
1
1.5
2007E 2008E 2009P 2010P
3.2 Indias pharmaceutical outsourcing
landscape is well positioned to provide
services in the area of late stage discovery
(research chemistry) and drug development
services. The country has recognized the
need to develop its early stage discovery
(research biology) capabilities and has
begun investing in this area.
Section 3
Our vision is to catapult India into top fve pharma discovery and innovation hubs by 2020 with a signifcant number of drugs discovered
worldwide by 2020 coming from India. We want to position India as the destination of choice for global pharmaceutical R&D.
In pursuit of this vision, we are working towards a novel and major initiative through a public-private-partnership to harness Indias
innovation capacity. We are planning focused action aimed at building world-class infrastructure for talent and research; encouraging
public-private-partnership in infrastructure development for discovery research and clinical research; offering public private fnancial
instruments to encourage and incubate innovation; and shaping a favorable growth supportive environment. These efforts will be directed
towards reaping social and economic benefts including creation of approximately 500,000 new jobs employing pharmaceutical scientists,
researchers and technicians and fnding cost effective cures for diseases endemic in India and elsewhere in addition to many more
opportunities for indirect employment. The contribution of the pharma industry to the Indian GDP needs to be targeted to increase by
about USD20b in 2020. This would include worldwide sales generated by new drugs discovered in India, those developed through off-shore
partnerships, as well as drug discovery and innovation by companies and organizations overseas who locate their research projects in India
to take advantage of world class research infrastructure, rich talent and human resource and competitive cost advantage emanating from
our efforts under this proposed vision.
Ashok Kumar
Secretary, Government of India,
Ministry of Chemicals & Fertilizers,
Department of Pharmaceuticals
Taking wings 78
Capabilities required across value chain according to
their infuence

Pre-clinical to clinical trial
Phase II a
Speed of delivery
As the drug candidate moves from discovery research to development, the importance of speed of delivery becomes more important as a delay of
even a few days can jeopardize millions of dollars in potential revenues.
Innovation
Innovation is the ability to deliver new value to the customer in a non-deterministic environment. As the drug candidate moves from discovery
research to development, where both expectations and activities become more deterministic, operational excellence takes the place of innovation.
Process safety
Implementation of a high level of safety standards are of paramount
importance since the development of new drugs involves new reactions/
chemicals, whose effect on the safety of people, equipment and facilities
are not completely known.
Low High
Degree of inuence
Flexibility
Financial crises, high rate of failure of drugs in development stages, changing market dynamics all create an environment of uncertainty where
customers value the ability to scale up/down or focus/de-focus in certain areas as and when needed.
Integrated capabilities
Integrated capabilities, demonstrated by a one-stop shop offering end-to-end services right from research biology to chemistry, scale up from
laboratory to pilot plants across API as well as formulations are of paramount importance.
Cost value proposition
The margins of pharma companies are dwindling due to increasing genericization and rising R&D costs. With this background, one of the key
themes of outsourcing is cost saving with no compromise on quality.
Drug discovery Drug development
Critical parameters would be to maintain the competitive edge in terms of cost and timelines, quality being a given. It is imperative to
anticipate all major milestones, including the regulatory process, in one go, refect those in a reasonable manner in the timelines and then
adhere to those timelines.
Mukund Ranade
Director
Emcure Pharmaceuticals Ltd.
Indias strengths drug development and research
chemistry
A view of how India measures against the key evaluation criteria for outsourcing decisions
The analysis is based on the Ernst & YoungOPPI survey and interviews conducted with 25 respondents across 10 big and mid-tier
global pharma companies and Indian suppliers. The respondents were from research and development teams, sourcing teams and
included senior executives spread across Europe, US and Asia.
Evaluation criteria Drug discovery Development
Speed of delivery L M-H M-H
Flexibility L-M M-H M-H
Capability L M H
Cost value proposition L-M M-H H
Innovation L L L
Process safety NA NA L
Capability rating: H = High, M = Medium, L = Low
India offers a unique cost value proposition in drug development and
research chemistry, supported by process, analytical and research
chemistry, a large talent pool and GLP-compliant facilities.
India advantage
Process, analytical
and
research chemistry
Cost value
proposition
Talent pool
GLP-compliant
R&D facilities
Taking wings 80
Indias technical capabilities development, research
chemistry
India has strong capabilities in process and analytical chemistry
India has developed strong process chemistry capabilities ranging across a wide range of reaction types spanning old
technology-based chemistry, complex and hazardous chemistry and high-end reactions.
India has strong analytical chemistry capabilities, e.g., method validation and transfer, solubility, fowability and
compressibility studies.
India has strong process development and scale up capabilities for clinical APIs and formulation manufacturing of solids,
semi-solids and liquids and are growing for powders (lyophilization) and parenterals.
Reaction type High end Hazardous Complex chemistry Old technology
Existing capability Chloroalkylation Sulphonation
Cyanation
Oxidation Benzoylation
Dealkylation
Methylation
Emerging capability Ring chlorination
Catalytic
hydrogenation
Nitration
Cytotoxics
Pyridines
Grignard
Chiral
Source: Ernst & Young research
Capabilities Compound generation Screening Lead optimization
Existing capability Analogue preparation
Synthesis
Analytical chemistry
Compound synthesis
Medium throughput
screening
Medicinal chemistry
Emerging capability Drug design
Structural chemistry
Assay development Assay execution
Structure activity
relationships
Need to build capabilities High throughput screening
(HTS)
Cell-based model for
effcacy
Source: Ernst & Young research
which has helped it to build its capability in research chemistry.
Indias R&D legacy has been focused on the development of generics for western markets, which involved developing non-infringing
process- and cost-effective routes. It has been able to leverage this capability in research chemistry, especially in the areas of
medicinal chemistry, analytical chemistry and compound synthesis.
India has strong process and analytical chemistry skills which
have driven Indias capability to offer clinical development and
manufacturing of APIs and intermediates. India offers these services
during pre-clinical and clinical development at micrograms and grams
level and can scale up to kilogram and several tons level.
Senior Executive based in India
Global Big Pharma
India has strong capabilities in New Chemical Entity
(NCE) development. We are sourcing a several NCE
intermediates from India which go into manufacturing
of NCE molecules during clinical trials, from phase I to
phase III.
Senior Executive based in India
Global Big Pharma
and pre-clinical services but needs to build research
biology skills
Reaction type Pharmacology PKDM Toxicology Animal models for effcacy
Existing capability Safety
Effcacy
Bioanalysis
In Vitro ADME
In Vivo ADME
General
Reproductive
Genotoxicology
Immunotoxicology
Carcinogenicity
Rodents
Dogs
Emerging capability Primates
Source: Report of the working group on drugs and pharmaceuticals for the 11
th
Five Year Plan (20072012), Planning Commission of India, 1 December 2006
In drug discovery and early development, we are likely to see a major push to set up risk based collaborative programs. The great question
will be the ability to develop the biology and preclinical animal models to be effective. Also, we will need to look at novel ways to fnancing
these collaborations, as operating profts will be needed to funded revenue growth and the timelines for research are signifcantly
back ended.
Dr. Ranga Raju
Chairman and CEO
SaiAdvantium
India has also developed pre-clinical services capabilities
India has at least eight animal testing facilities (existing and under development) that are capable of using dogs as an animal model for
effcacy. These include Zydus Cadila (Gujarat), Advinus, Jubilant, Dr. Reddys Laboratories and Wockhardt. Two sites for a primate-
based animal model for effcacy are under construction
1
.
Source: 1.Industry sources
and is moving toward building research biology capabilities
Traditionally, Indias focus area has been chemistry-based skills, which resulted in a limited focus on research biology capabilities.
However, it has realized the importance of basic biology capabilities and has begun building them.
Gene
sequencing
Bioinformatics Chemoinformatics Proteomics Genetics Target identication
Bioimaging
Genetically
modied mice
Disease
model
Protein
biochemistry
Functional
genomics
Existing capability Emerging capability Need to build capability
Target validation
Source: Off shoring in the Pharmaceutical Industry: Mridula Pore, Yu Pu, Charles Cooney, Massachusetts Institute of Technology, Ernst & Young analysis
Taking wings 82
Large and growing English-speaking pool of skilled and
experienced professionals offered by India
Growing pool of talent in the area of chemistry
India has a large number of science graduates and postgraduates (especially MSc chemistry), pharmacists and doctorates.
Annual supply (200708)
1,600,000
400,000
150,000
50,000
1,500
Science graduates
Science post graduates
Chemistry post graduates
Pharmacists
(Graduate + post gradute)
Phd. Science
Source:
Annual Report 2007-08, HRD Ministry
Science Education in India : by Prof. G. Padmanaban), Report of the Committee
to Review the Pay Scales and Service Conditions of University and College
Teachers, 2008
University development in India, basic facts and gures, University Grant
Commission, Government of India
NCAERs National Science Survey 2004
Industry sources and Ernst & Young analysis
Segment Qualifcation (s)
Research chemistry Doctorates in chemistry
Post graduation and Graduation in chemistry
Post graduation, Graduation, Diploma in pharmacy
Process chemistry
Analytical chemistry
Growing pool of students enrolling in science
courses
It was estimated that India would have ~ 2.1 m students enrolled
in (graduate +) science graduate courses in 200708.
Gross enrolment in higher education (Graduate+ )
for science course
Source: University development in India, basic facts and gures,
University Grant Commission, Government of India
NCAERs National Science Survey 2004; Ernst & Young analysis
1.3
1.8
2.1
0
0.5
1
1.5
2
2.5
In millions
1995 - 96 2003 - 04 2007 - 08
Patent expiries of blockbuster drugs, ballooning R&D costs together with low R&D productivity, more and more stringent regulatory
standards coupled with intense cost containment measures are exerting intense pressure on the bottom lines of the global pharmaceutical
companies. Such a scenario is increasing interests of these companies towards various Business Processes Outsourcing initiatives such as
contract research and manufacturing services (CRAMS) to lower cost countries like India.
At the same time, many Indian pharmaceutical companies are engaging themselves in basic research and development either independently
or through various collaborative ventures.
To encourage innovation, OPPI has collaborated with two premier R&D focused institutes in India, National Institute of Pharmaceutical
Education & Research (NIPER) and Council of Scientifc & Industrial Research (CSIR) through a public-private-partnership arrangement,
constituting Scientists and Young Scientists Awards at both the institutes. The winners will be awarded a cash Prize of INR1 lakh each, along
with a citation and trophy at the OPPI Annual General Meeting.
Tapan Ray
Director General
Existence of GLP-compliant R&D facilities in the country
but need for enhancement of existing level of speed,
fexibility and process safety
India has 48 GLP-approved process and analytical chemistry facilities
Facility type No. of facilities
Toxicity studies 11
Mutagenicity studies 9
Analytical and clinical chemistry testing 8
Physical-chemical testing 7
Environmental toxicity studies on aquatic & terrestrial organisms 4
Residue studies 3
Studies on behavior in water, soil and air; bioaccumulation 2
Studies on natural enemies and predators 1
Studies on effects on mesocosms and natural ecosystems 1
Safety pharmacology and pharmacokinetic studies 1
Others (drug metabolism and pharmacokinetics [DMPK] and tissue distribution studies) 1
Source: Ministry of Commerce and Industry, Department of Commerce, Government of India - Strategy for Increasing Exports of
Pharmaceutical Products, 12 December 2008
India has more than 200 Department of Scientifc and Industrial Research (DSIR)-approved in-house pharmaceutical R&D units,
1
which
are eligible for all R&D related fscal incentives.
Source: 1.Report of the working group on drugs and pharmaceuticals for the 11th Five Year Plan (2007-2012), Planning Commission of India, 1 December 2006
...but needs to enhance speed of delivery, fexibility and process safety standards to become a favorite
destination for drug development outsourcing.
Due to Indias legacy of process innovation, Indian players focus more on attaining process optimization, and consequently, miss
project deadlines sometimes. While process optimization is an important criteria, agility of response and fexibility to adapt to
customer needs matter the most in drug development. Further, in India, which is a generic market, drug development involves known
reactions and chemicals. This has resulted in inadequate attention being paid to the required safety and health standards in labs and
pilot plants.
Sourcing capabilities also directly infuence the ability to provide timely and speedy delivery. Indian suppliers have a tactical approach
to sourcing as compared to the strategic approach required. There is a tendency to be more price-oriented rather than build long-term
contracts. Indian suppliers have recognized this need and have now begun exploring partnerships or setting up operations and offces
abroad to leverage strategic sourcing advantages.
Taking wings 84
Signifcant cost arbitrage offered by India for
development and research chemistry outsourcing
In end-to-end research and development, India offers 61% cost savings vis--vis the US. Research chemistry and drug development
are stages where close to 85% of savings can be achieved.
India has a pool of trained resources with chemistry capability and pharmacists six times as large as that in the US at less than
1/10
th
the cost.
1
The annual salary of a medicinal chemist in the US is around USD250,000, while in India it is around USD20,000.
Source: 1.CRAMS Sector Report The India Advantage Story, Enam Securities, March, 2007
Potential savings in outsourcing end-to-end research and development to India
Source: Boston Analytics Research, An Introduction to the Indian Pharmaceutical Industry, October, 2007, Ernst & Young analysis
24
Total cost
savings
of 61%
27
39
9
100
Total R&D cost
in the US
Research
biology
Research
chemistry
Development
cost
Total R&D cost
in India
Cost index
Relative indexed cost of skilled FTEs Annual salary comparison (medicinal chemist)
Source: CRISINFAC/Motilal Oswal Securities Report, 2006 Source: Report of the working group on drugs and pharmaceuticals for the 11
th

Five Year Plan (20072012), Planning Commission of India, 1 December 2006
7
70
100
95
0
20
40
60
80
100
US Germany Italy India
250
20
0
50
100
150
200
250
USD 000 Cost index
US India
Indian players building presence across drug
development and research chemistry
Indian players have capabilities across late stage drug discovery and development
Company LI HS LO PCB SA AMDT PC&D AC ST
Acoris (100%
subsidiary of Hikal)

Chembiotek
Dishman
Divis Laboratories
Ltd.

Emcure
GVK Biosciences
Indus Biosciences
(subsidiary of
CiVentiChem)

Jubilant Biosys &
Chemsys

Kemwell
Piramal Healthcare
Rubicon
SaiAdvantium
Suven Lifesciences
Syngene
Source: Ernst & Young research and analysis (based on company websites), Note: This is not an exhaustive list in terms of players or their capabilities
LI: Lead Identifcation
HS: Hit screening
LO: Lead optimisation
PCB: Preclinical biology (PK/ADME)
SA: Safety Assessment (in vitro/in vivo toxicology)
AMDT: Analytical method development and transfer
PC&D: Process chemistry and development
AC: Analytical chemistry
ST: Scale up and transfer
Taking wings 86
and extending their business development and delivery
footprint across frontiers
Indian players are building global assets to move closer to customers
In the case of drug development, customers, especially emerging biopharma/small biotech companies, prefer the geographical
proximity of their outsourcing partners. As 75% of the R&D pipeline is expected to come from these companies, Indian players have
realized the importance of moving closer to their customers to provide the latter much needed comfort.
Names of Indian players Acquisitions/Expansion Geographies
Biocon
30% stake in IATRICa US
Nobex Corporation US
Dishman Carbogen and Amcis Switzerland
Jubilant Target Research Associates US
Kemwell Pfzers Site in Uppsala Sweden
Piramal Healthcare Limited
Avecia Limited
Billingham, UK
Torcan, (Canada)
Grangemouth (Scotland)
Pfzers facility in Morpeth Morpeth, UK
Shasun Rhodia (pharmaceutical custom synthesis business) France
Source: Ernst & Young research and analysis
.and forming alliances with global players in the drug development space
Kemwell, an India-based company providing contract research services in drug development, has formed an alliance with Patheon,
a leading global provider of contract dosage form development and manufacturing services. The alliance will enable them to market
each others services to their clients
1
.
Source: 1.www.outsourcing-pharma.com
Big Pharma companies and global outsourcing service
providers focusing on India for drug development and
research chemistry
Global Big Pharma companies are attracted to India for chemistry-related work
Big Pharma companies have been outsourcing to/collaborating with Indian companies right from lead identifcation and optimization
to clinical manufacturing (custom chemical synthesis and formulation development).
Company LI HS LO PCD CD
Eli Lilly
Merck
Forest Labs
Amgen
Astra Zeneca
Wyeth
Ortho McNeill Jannson, J&J
Novo Nordisk
BMS
Glaxo Smith Kline
Source: Ernst & Young research and analysis (based on company websites) Note: This is not an exhaustive list in terms of players or their capabilities
LI: Lead Identifcation HS: Hit screening LO: Lead optimisation PCD: Preclinical development CD: Clinical development
and western drug development outsourcing service providers are setting up bases in India
Lonza is planning to set up a base in India with an investment of USD150m at Hyderabad. The investment will be in two phases
Phase I (from 2011 to 2013) will include development of R&D labs for over 100 resources and Phase II (from 2014 to 2015) will
include expanded manufacturing capabilities and additional R&D lab capacity for biologics with additional 200 resources
1
.
Albany Molecular Research (AMRI) has followed up its push into new markets for its drug discovery operations by tapping into the
well-established trend to source contract pharmaceutical manufacturing from India. The company has acquired the assets of Ariane
Orgachem Pvt. Ltd. in Aurangabad and Ferico Laboratories Ltd. in Navi Mumbai.
2
.
Sources:
1.www.fercebiotech.com
2.www.outsourcing-pharma.com
Taking wings 88
and exploring various operating models
Sponsors
Global pharma big pharma, medium and small pharma and biotech
Captive (offshoring)
Dedicated R&D
unit in partnership
Fee for services Collaborative/JV
MNC pharma company sets
up own drug discovery
(R&D) center in India,
e.g., AstraZeneca
MNC pharma company
partners with an Indian
outsourcing service
provider to set up a
dedicated R&D unit, e.g.,
Bristol-Myers Squibb
MNC pharma company
pays a xed fee for all the
services it avails from the
service provider, e.g.,
Eli Lilly
MNC pharma company
enters a risk-reward-
sharing collaboration for
drug discovery and
development, e.g., Eli Lilly
Captive (offshoring) Dedicated R&D unit in partnership
The captive offshoring model, which works in synchronization
with the global R&D network, offers the unique advantage of a
24x7 workforce and thereby increases the speed of delivery.
Further, control on the intellectual property is direct and hence
more reliable than other models. However, costs may be much
higher vis--vis other models.
A dedicated R&D unit in partnership requires a higher degree
of co-ordination between the customer and vendor, resulting in
better understanding of mutual expectations. Cost advantages
still exist as manpower can be varied according to requirement.
Fee for services Collaboration/JV
Traditionally, fee-for-services has been the most common type
of customer-vendor relationship in the Indian drug discovery and
development outsourcing space. Fee-for-services is a fxed-term
association which leverages cost advantage. However, there
may be larger risks in terms of IP, communication gaps and
project timelines.
Collaboration and JV work on a risk-reward sharing model and
is based on milestone success. The sponsor offers the lead
molecule to the service provider to develop it through clinical
trial phases. The service provider receives milestone payments
and a certain percentage of sales after the commercial launch.
AstraZeneca case study leveraging developing market
cost advantage by establishing captive R&D centers
AstraZeneca, the UK-based USD31b Big Pharma, is one of the frst companies to use India as a base for carrying out its R&D work. It
has established two captive centers for carrying out research work in India.
Captive R&D center : As early as 2003, it established a captive R&D facility at a cost of USD10m in Bangalore, with a view of
making it a Center of Excellence with a mandate to discover new chemical entities for the treatment of diseases of the developing
world. The facility is presently dedicated to fnding a new therapy for tuberculosis that will act on drug-resistant diseases and
will reduce the complexity and/or duration of treatment. More than 80 scientists, including biotechnologists, pharmacologists
and medicinal chemists, work in the center. These scientists work closely with AstraZenecas Global R&D network, including the
infection research center in Boston, US, as well as with academic leaders in the feld.
Captive Process Research & Development centre ( PR&D ) : In March 2007, AstraZeneca opened a new PR&D laboratory in
Bangalore, India, to leverage Indias strength in process chemistry. It was the frst time that AstraZeneca established a PR&D lab
outside UK or Sweden. This facility built at a cost of USD15m, covers 8000 square meters on a 14,200 square meter plot, and can
accommodate up to 75 process scientists. The successful delivery of global projects in terms of cost,quality and time has resulted
in the decision of expanding the PR&D, Bangalore, to 120 scientists by the end of 2010. The success can also be attributed to the
existence of suitable Indian vendors who have been able to meet the PR&D requirements of early intermediates as well as larger
amounts of later campaign material . This center was located close to the discovery R&D center to facilitate knowledge sharing and
reducing costs by optimizing use of shared resource.
According to David Brennan CEO AstraZeneca, the advantage of doing research in India, besides the cost advantage is, We are
moving some of our work from Europe to India. We get high quality work from our people here. So, the cost is certainly a factor but it is
quality of work and the speed that we get here that are the primary drivers. Another advantage is getting a 24-hour cycle instead of our
old 12-hour cycle. You gain a day and that speeds things up. Besides, our people here have shown to our people in Europe that they are
highly skilled and can handle high quality work. We spend a billion dollars to get a drug to market, we have to look at fastest options.
1
The success of PR&D Bangalore in meeting the Global project needs in terms of quality cost and time while working with local vendors has
spawned interest among the other AZ global departments with outsourcing needs to look at India as a potential destination for outsourcing
Senior Executive based in India,
AstraZeneca India Ltd.
Source: 1.Business world
Taking wings 90
Bristol-Myers Squibb case study driving R&D through
strategic collaborations
Collaborating globally for strategic advantage:
Bristol-Myers Squibb, with an R&D spend of 17%, is amongst
the worlds top fve drug companies with 65 product lines
1
.
In addition to its in-house research and development efforts,
the company actively pursues products through research
collaborations and strategic alliances. This enables it to leverage
its partners expertise and expand its capacity in a cost-
disciplined way. Globally, the company has strategic research
partnerships with other leading pharmaceutical companies such
as Astrazeneca, Pfzer.
R&D collaboration model adopted in India:
BMS has been active in the R&D space in India through its
research partnership with Biocon through its subsidiary
Syngene since 1998, to develop integrated drug discovery and
development capabilities. The company opened a 200,000 sq
ft dedicated R&D facility in partnership with Biocon, called the
BMS-Biocon Research and Development Centre (BBRC ), in
Bangalore, India. The R&D work at the facility spans initial hit to
lead optimization, early pharmaceutical development, clinical
nomination ,and further into clinical phase studies
2
.
The facility can accommodate 450 researchers. Currently, there
are 300 researchers employed in it and the number is expected
to reach to 360 by the end of 2009
2
.
Biocon (Syngene) has set up the facility, and, according to
business arrangements, will charge BMS an annual fee based on
the number of scientists employed in the facility.
3
This initiative indicates the sustained interest of BMS to
undertake R&D in India in a cost- effective manner. According
to a BMS spokesman, the company has plans of investing about
USD300m in R&D in India over the next eight years
4
.
Supporting development of scientifc excellence
in India:
In addition to expanding its R&D capabilities in India, BMS
supports the development of scientifc excellence in the
country. Since 2007, it has established fellowships supporting
doctoral and post-graduate students at academic institutions
in the areas of biology, medicinal chemistry, pharmaceutics,
drug metabolism, toxicology , chemical engineering, clinical
pharmacology and translational medicine.
5
Note: All the information contained in the case study above has been obtained from the following publicly available sources:
1.Datamonitor and ESPICOM,
2.The Financial Express, March 23, 2009,
3.Frost & Sullivans Movers & Shakers interview with Syngene (2009),
4.www.reuters.com,
5.www.biospectrumindia.ciol.com
Eli Lilly case study: dissolving boundaries to
build network
Moving from FIPCO to FIPNET:
Eli Lilly has made considerable progress in transforming itself
from a fully integrated pharmaceutical company the old FIPCO
model into what it refers to as a fully-integrated pharmaceutical
network the FIPNET model. In the new model, the company
draws on a broad range of resources outside the companys
walls to increase effective capacity, access external capabilities,
reduce level of risk, accelerate development and help to lower
the average cost of the R&D per molecule.
As part of this model, the company has sold its 600,000 sq.
ft. Greenfeld Laboratories facility in Indiana, which carries out
preclinical toxicology and other early-stage drug discovery work,
to Covance for USD50m. Covance has also received guarantees
of USD1.6b in drug development contracts from Lilly for over
the next 10 years.
Further, the company has announced that it will transfer its
clinical trial monitoring work in the US and Puerto Rico to
Quintiles and the majority of its data management work in
the United States to i3, a full-service, global clinical research
organisation.
The emergence of Lilly as the hub of a FIPNET should contribute
to the companys productivity gains across the business. Since
2003, Lilly has reduced its headcount by about 11% worldwide,
increased its net sales per employee by 64%, improved gross
margin as a percent of sales, and reduced manufacturing, R&D
and administrative infrastructure while increasing overall output.
Bringing India into the network:
Under the FIPNET model, the company has adopted a mix
of traditional outsourcing (fee for services), collaborative
partnership (risk-reward sharing) and JV to leverage Indias
strengths in R&D:
Traditional outsourcing (fee for services): The early-stage
discovery efforts with Jubilant in India is an example of
traditional outsourcing where Lilly has signed a fve-year drug
discovery pact with Jubilant in 2006.
Collaborative partnership (risk-reward sharing): The
company has entered a collaborative partnership with
Piramal, which is developing selected molecules from the
companys pipeline up to the end of Phase II, in exchange for
milestone payments and a royalty if a product reaches the
market. According to the business arrangement, Lilly has the
option to bring the molecules back into its portfolio. Lilly has a
similar risk-sharing collaboration with Suven Pharmaceuticals
in Hyderabad.
Joint Venture with Jubilant: Lilly has set up a 50:50 joint
venture with Jubilant in Bangalore that will see the two
companies collaborate on the development of new drugs
in oncology, metabolic diseases, cardiovascular diseases
and diabetes. The JV, called Vanthys, will take the lead
compounds obtained from the two parents or outside through
the development till the Phase II stage by outsourcing work
to a host of companies engaged in CRAMS business in India.
The molecules will then be returned to their originators for
further development.
Source: Eli Lilly and Company 2007 Annual Report, www.outsourcing-pharma.com
Drug Discovery and Early stage development outsourcing in India will move from simple FTE based or project based business models to more
complex and integrated ones, with risks and rewards being shared by both partners. Indian CROs are evolving rapidly in their capabilities
and are aspiring to share the rewards of the intellectual property generated early on through the outsourcing deals. Big Pharma, pressed
for resources, are looking for high quality throughput from the partners they engage with, to get fexibility, speed and access to talent and
capacity outside of their own walls.
As the early stage work is maturing, there is a need being felt for integrated players who have the capabilities and capacities to carry the
molecules through the entire development work here.
Mukta Arora
Head Global Sourcing
Eli Lilly and Company (India) Pvt. Ltd.
Taking wings 92
India lacks a culture of innovation due to legacy issues
such as low levels of funding, educational infrastructure
and collaboration between industry and academia...
In most parts of the world, relevant innovations take place at all three key centers such as universities, public institutions and industry.
In India, beyond the initial beginnings in public sector and public institutions, linkages were not established suffciently between these
three centers of innovation.
Low level of fnancial resources allocated to R&D
India is lacking on the two key parameters of monitoring resources devoted to R&D in the science and technology area Gross
Expenditure on R&D (GERD) and R&D Intensity (measured by ratio of GERD to GDP) as compared to developed countries and China.
Gross expenditure on R&D (GERD) and GERD as a % GDP
Source: Measures of Progress of Science in India, 2006 Report by National Institute of Science, Technology and Development Studies (NISTADS)
274.6
Billion USD PPP
98.6
55.5
51.5
31.3
27.0
22.7
13.0 12.0
0.1
2.8%
3.1%
1.9%
1.2%
0.8%
2.2%
1.1%
2.5%
1.1%
2.1%
0
50
100
150
200
250
300
USA Japan China Germany France UK India Brazil Russia Singapore
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
Gross expenditure on R&D (GERD) GERD as a % of GDP
According to the planning commission
1
report Several MNCs are of the opinion that 2025% of science graduates are suitable for the
deliverables the industry is looking at.
Key reasons
Collaboration between industry and academia: A two-way traffc of knowledge and experience between industry and academia is
quintessential for innovation. Unlike in the West, this is comparatively lower in India due to minimal movement of people between
the above. The movement from industry to academia needs to increase signifcantly to ensure cross-fertilization of ideas.
Education system: To innovate, scientists need to draw from different disciplines such as mathematics, biology and chemistry.
However, the education system in India creates scientists who have little exposure across disciplines due to the excessive focus
on specialization and minimal opportunity to change disciplines. This has hampered innovation in drug discovery in India, since
innovation in drug discovery is essentially the result of interdisciplinary processes.
Lack of exposure: Educational institutes lack the relevant exposure to the industry due to the non-existent interface between the
academia and the industry.
Outdated curriculum: Courses need to be developed for existing professionals to include programs in regulatory affairs, IPR, legal
issues and scientifc development.
Less attractive career option: A number of young students prefer to choose engineering as a career option rather than pure
sciences such as biology or chemistry.
Brain drain: Migration of Indian pharmacists to other countries also affects the Indian pharmaceutical industry. It is estimated that
39% of the pharmacists working in the US are of Indian origin.
Source: 1.Report of the working group on drugs and pharmaceuticals for the eleventh fve year plan (2007-2012), Planning Commission of India, 1 December 2006
refected in Indias low standing in research
output indicator
Between 1996 2006, India has published less than 1/10
th
of the total number of papers published in the US. Also, during the same
period, China has published close to twice the number of papers as India.
During the same period, only 0.33% of the papers authored by scientists from India were among the top percentile (1%) of Web of
Science (coverage of WoS stands at + 85,00 across all disciplines in science) papers when arranged in decreasing order of citations
received. While 0.52% of the papers authored by scientists from China were among the top percentile (1%). India was ranked 13
th
by
percentage of papers in the top 1% cited papers while China was ranked 10
th
.
Total papers published between 1996 2006 Percentage of papers
cited among top 1%
Source: King, C., Science Watch, May/June 2007
125
180
211
248
263
369
395
423
536
661
743
791
2,908 1.87%
0.72%
1.27%
1.53%
1.11%
0.52%
1.34%
1.04%
0.82%
1.13%
0.33%
0.52%
0.44%
Rank by percentage of papers
in top 1% cited papers
1
9
4
2
6
10
3
7
8
5
13
11
12 Taiwan
S. Korea
India
Australia
Spain
Italy
Canada
China
France
UK
Germany
Japan
US
India has only 1/10
th
and 1/5
th
the number of total research workers in the US and China.
Research workers (FTEs)
Source: Measures of Progress of Science in India, 2006 Report by National Institute
of Science, Technology and Development Studies (NISTADS)
India
China
US 1,261,200
810,500
117,500
Taking wings 94
Initiatives being taken to provide much needed impetus
to research and innovation in pharma and biotech
Objective Key initiatives undertaken
Promote Indian drug
discovery platforms
Vision 2020 program
The Government of India is embarking on a major multi-billion dollar initiative with 50% public funding
through a public-private partnership model to harness Indias innovation capability. The vision is to catapult
India into one of the top fve pharma Innovation hubs by 2020 with one out of every 510 drugs discovered
worldwide by 2020 coming from India.
Collaborations
between industry,
academia and
government
New Millennium Indian Technology Leadership (NMITLI)
Partnered with 222 public sector and 65 private sector entities on projects aimed at innovation centred
technology development, e.g., joint development between CDRI, NIPER and an Indian pharmaceutical
company for a new single ingredient oral herbal drug for psoriasis, which is under Phase II trial
Drugs and Pharmaceuticals Research Program (DPRP)
Set up a number of public funded research and development centers to conduct joint research projects
Some of the achievements under this program:
Synthesis of anti-mycotic and structurally unique anti-cancer agents
Rational design and synthesis of novel anti bacterial agents
Focus on specialized
pharmaceutical
education
National Institute of Pharmaceutical Education and Research (NIPER)
The government has set up 7 NIPERs as institutes of national importance to achieve excellence in
pharmaceutical sciences and technologies, education and training.
Translational Health Science and Technology Institute (THSTI)
DBT has partnered with Massachusetts Institute of Technology (MIT) to set up a THSTI. The vision of
the institute is to emerge as a world leader in translational research at the interface of medicine and
engineering, built on a strong foundation of basic and applied sciences.
Fiscal incentives for
proftable operations
Department of Scientic and Industrial Research (DSIR) recognition for availment of fscal incentives
DSIR is the nodal department for granting recognition to in-house R&D units in industry. In-house R&D units,
as recognized by DSIR in the area of Pharma and bio-tech sectors, are eligible for the following benefts:
Duty-free import of specifed goods for R&D, production and pharmaceutical reference standards
Weighted tax deduction of a 150% of any expenditure incurred on scientifc research (except for
expenditure on cost of any land, building)
Source: Report of the working group on drugs and pharmaceuticals for the eleventh fve year plan (2007-2012), Planning Commission of India, 1 December 2006
Indian Government is playing an effective role in fostering the growth in pharma by adopting product patent regime in 2005 and recently
proposed a 2020 initiative to transform India into a global leader in pharma innovation in order for India not only move up in the drug
discovery arena but also make India as an attractive destination for innovative research and development outsourcing
For innovation led growth huge infrastructure is to be created to upgrade educational system to train scientists, new world-class research
incubators and for patenting needs along with fscal benefts to the industry for taking up drug discovery and development activities. Long
term commitment with a special fund needs to be created which the Government through Department of Pharmaceuticals has announced to
the tune of $2 billion and if that implemented it will be a boon to Indian Pharma.
In addition to the above some other proactive fscal measures have to be taken like the total R&D expenses (including clinical trials and patent
related) whether incurred in India or abroad should be included for weighted average deduction under section 35 (2ab) and these benefts
should be extended permanently but not for 3 to 5 years to promote new chemical entity (NCE) based research.
Finally Indian Government should promote Public/private partnerships between the National institutes, Academia and Industry for the long-
term sustained growth in this sector.
Venkat Jasti
Managing Director
Suven Life Sciences Ltd.
fueling Indian pharmaceutical companies to pursue
drug discovery programs
In spite of lack of credible track records India has shown tremendous progress in developing good medicinal chemistry and biochemical assay
development skill. To really become a serious discovery player, we need to develop high level animal biology and pharmacology skills which
are still at a nascent stage. Discovering novel drug targets will also help us to boost our confdence in innovative biology, an area where we
need to change the general perception of our capabilities.
Dr. Goutam Das
COO
Syngene
Indian pharma companies increasing investment in R&D
Indian companies are pursuing new drug discovery research
Companies are using two strategies to mitigate risk and reduce costs in this area fnding a new drug within an existing family that has
been discovered and out-licensing the drug candidate to MNCs after its pre-clinical stage.
India began investing in R&D for drug discovery-related work in
the mid 90s .
R&D activity has seen a signifcant impetus in the last seven
years, resulting in the total R&D spend increasing by almost
12 times over this period. In 2008, the Top 10 companies (by
sales in value) had a cumulative sales of USD5.1b and invested a
cumulative sum of USD387m in R&D, which accounted for 7.5%
of their total sales.
1
Source: 1.CMIE Data Base Prowess
Specifcs 2001 2008 Comments
R&D
expenditure as
a% of sales
1.4% 9.9% 7 times
R&D
expenditure in
absolute terms
(USD m)
55 660 12 times
Source: Ernst & Young analysis of top 25 pharmaceutical companies operating
in India
Drug development pipeline of key Indian companies
Discovery/
Preclinical Phase
Phases
I II III
Ranbaxy 6 0 1 0
Dr Reddys 1 1 0 1
Glenmark 6 2 3 0
Zydus Cadila 4 3 2 0
Piramal
Healthcare
10 3 4 0
Lupin 4 1 2 1
Sun 3 0 1 0
Note : This is only an illustrative list of companies involved in discovery research in India.
Source: Company websites, Ernst & Young analysis
Category of diseases Indian pharma companies are
working on
Company Category of diseases worked on
Ranbaxy Infectious, respiratory, urinary
diseases and diabetes
DRL CVS, infection, diabetes and
cancer
Glenmark Respiratory and infammatory
diseases, diabetes and obesity
Zydus Cadila Diabetes, infammation, obesity,
novel drug delivery
Piramal
Healthcare
Oncology, infammation and
diabetes
Source: Company websites
Taking wings 96
Need for India to rapidly build its research biology and
enhance its development capabilities to emerge as a
partner of choice for global pharma
Although Indian companies have only recently started partnering with global companies in drug discovery and development, the
industry been growing at a rapid pace. Indian players are today at a threshold where investing in the right capabilities will differentiate
them from the rest of the world as global players. These include:
Creating global reach through acquisitions and partnering models
Developing end-to-end capabilities from research biology to clinical trial supplies across API and formulations
Building a culture of process safety and quality
Creating a project management mindset to enhance effciency and speed of delivery
Collaborating with government and academia to harness the power of innovation in delivering new value to the customer
Investing and building capabilities to tap the biologics market, which is expected to be the next frontier of growth in the global
pharma industry due to an estimated growth of 56% and an increase in market share from 17% in 2008 to 23% in 2014
1

Investing and building research biology, lyophilization and cytotoxics capabilities to capitalize on future high growth and niche
opportunities
Source: 1.World Preview 2014, EvaluatePharma Report, May 2009
Enhance process safety
standards
Enhance project
mangament capabilities to
increase speed of delivery
Enhance global asset
network
Research biology capability
Drug discovery and
development capability
in biologics
Research collaborations
between universities,
public institutions and
industry
Short medium (<3 years) Medium long (36 years)
Roadmap of initiatives needed to fuel domestic R&D and
drug discovery and development outsourcing
Drug Discovery is a very complex interdisciplinary area where successful outcome is not guaranteed. It needs signifcant resources in
terms of technology and highly trained people. For success in this area India needs to have a short term and long term plan. In short term,
highly trained personnel have to be recruited in key leadership positions who have consistently delivered high quality clinical candidates
and letting them build an international quality R&D facility and a project portfolio that will yield better than average chance of success in
clinical development. For long term, an education system that trains students in deep understanding of physical and natural sciences has
to be developed. This training also should focus on application of this knowledge to solving the complex issues that stymie drug discovery
progress towards high quality clinical candidates. Part of the training should also focus on developing excellent leadership, interpersonal and
communication skills. These are important in creating very highly functional discovery project teams that understand the complex mission.
The mantra is Excellent project teams deliver excellent products
Dr. Sham S. Nikam
Vice President Global Discovery, RDP/GD
Nycomed
Taking wings 98
Aatosh Chauhan
Sr. Relationship Manager, External Manufacturing
Chemical Operations
Merck
Ajay Piramal
Chairman
Alok Sonig
Managing Director, India
Bristol-Myers Squibb Company
Dr. Ananth Narayan
President & Director, Pharma Solutions
Ashok Kumar
Secretary, Government of India
Ministry of Chemicals & Fertilizers
Department of Pharmaceuticals
Dr. Ashoke Banerjee
Executive Director
GlaxoSmithKline Pharmaceuticals Ltd.
Dr. Bala Subramanian
Director, Infection Pharmacology
Dr. Balu Balasubramanium
Executive Director, Research and Development
Bhaskar R. Venepalli
President and CEO
CiVentiChem
Bjorn Treptow
Head Emerging Markets, Sourcing & COARTEM
Novartis Pharma AG
Chithur Devaraj
Strategic Sourcing Director Asia Pacifc
Wyeth Ltd., India
Deepak Naik
Managing Director
Eisai, India
Denzyl Sardinha
Head India Sourcing Centre, GES
AstraZeneca Pharma India Ltd.
Dr. Duncan Judd
Manager, Computational and Structural Chemistry
Research and Development, Harlow
GlaxoSmithKline Pharmaceuticals Ltd
G. K. Raman
Director - External Affairs
Bristol-Myers Squibb India Pvt. Ltd.
Dr. Goutam Das
COO
Syngene
Dr. H. Sivaramakrishnan
President, Research and Development
Harish Kapoor
Marketing & Sourcing Special Assignments
Associated Capsules Pvt. Ltd.
Dr. Hasit B. Joshipura
Chairman,
GlaxoSmithKline Pharmaceuticals Ltd., India
Helmut Altmann
Base Business, Director Generics Sourcing
Sanof Aventis
Ingrid Reinkober
Vice President
Global Procurement Raw Materials & Intermediates
Bayer HealthCare AG Leverkusen, Germany
Janmejay R. Vyas
Managing Director
Dishman Pharmaceuticals and Chemicals Ltd.
Jayant Dwivedy
President Global Supply Chain
Joe Principe
Head - Business Development (US)
K. R. Shekhar
Vice President, Procurement and Logistics
Bayer CropScience Limited
Kamlesh Patel
Director, APIs & Key Intermediates
Direct Materials & Capital, Global Procurement
Merck
Lorraine Hazlehurst
Director, GMS Strategy, Emerging Markets
Dr. Martin J. Hewlett
Director of Procurement APIs
Production Procurement Shared Service
Acknowledgements
Michael J Monaghan
Director Third Party Manufacturing, GMS
Mukta Arora
Head Global Sourcing
Eli Lilly and Company (India) Pvt. Ltd.
Mukund Ranade
Director
Emcure Pharmaceuticals Ltd.
N Govind Rajan
CEO & MD
Shasun Chemicals and Drugs Ltd.
Nicklas Westerholm
Director of API Supply, Global External Sourcing
AstraZeneca
Nilesh Wadhwa
Director - In Licensing
Aventis Pharma Ltd., Sanof-Aventis Group

Dr. Pankaj Shah
Executive Director, Research and Development
Phil Priest
VP, Head of Strategy, GMS
R. Shah
Director - Sourcing & Exports
Pfzer Ltd., India
Rahul Gupta
General Manager, Corporate Regulatory Affairs
Ramesh Krishnan
Vice President - Program Management
Ramesh Subramanian
Asia Pacifc President
Merck & Co, Inc.
Dr. Ranga Raju
Chairman and CEO
SaiAdvantium
Ranjit Shahani
Country President, Novartis Group in India
Novartis
Roger Cassidy
Procurement Director Outsourcing, Primary Supply
Global Manufacturing and Supply
S. R. Emani
Manager - Business Development
GVK Biosciences
Sameer Hiremath
Deputy Managing Director
Hikal Ltd.
Scott P. Laird
Business Director, External Chemical
Manufacturing Operations
Merck
Dr. Sham S. Nikam
Vice President Global Discovery, RDP/GD
Nycomed
Shayam Tiwari
Head - Sourcing Global Services
Novartis, India
Dr. Shireesh Ambhaikar
Director- Manufacturing & Industrial Purchasing
UCB India Pvt. Ltd.
Sri Mosur
President and CEO
Jubilant Biosys Ltd.
Steve Fishwick
Head LCCS, Global Procurement
AstraZeneca
Dr. Sudhir Nambiar
Head - PR&D
Dr. Surinder Singh
Drug Controller General of India
Ministry of Health and Family Welfare
Dr. Tanjore BalGanesh
Head of Research
Tapan Ray
Director General
Uday Dhupkar
Manager, Global Sourcing, Emerging Markets
Abbott India Ltd.Venkat Jasti
Managing Director
Venkat Jasti
Managing Director
Taking wings 100
Glossary of terms
Term Explanation
AC Analytical Chemistry
ADME Absorption, Distribution, Metabolism, Excretion
AICTE All India Council for Technical Education
AMDT Analytical Method Development and Transfer
AMRI Albany Molecular Research Inc.
ANDA Abbreviated New Drug Application
ANVISA Agncia Nacional de Vigilncia Sanitria (National Health Surveillance Agency Brazil)
The Agency is linked to the Ministry of Health in Brazil. The institutional purpose of the agency is to foster protection of the health of
the population by exercising sanitary control over production and marketing of products and services subject to sanitary surveillance.
API Active Pharmaceutical Ingredient
BBRC Biocon Research and Development Centre
BMS Bristol-Myers Squibb
CAGR Compound annual growth rate
CD Clinical Development
CDER Center for Drug Evaluation and Research
It is a division of the U.S. Food and Drug Administration (FDA). Its primary objective is to ensure that all prescription and over-the-
counter (OTC) medications are safe and effective when used as directed.
CDRI Central Drug Research Institute
CDRI was established under the Council of Scientifc & Industrial Research, an autonomous registered Society of the Government of
India, as a centre of excellence dedicated to drug research. CDRI is considered to be a pioneer research organization in the feld of
biomedical research where all the infrastructure and expertise are available to develop a drug right from its concept to market.
CDSCO Central Drugs Standard Control Organization
CDSCO is responsible for approval of new drugs, regulation of clinical research, laying down the standards for Drugs, laying down
regulatory measures, amendments to Acts & Rules, control over the quality of imported Drugs, coordination of the activities of State
Drug Control Organizations and providing expert advice with a view of bring about the uniformity in the enforcement of the Drugs and
Cosmetics Act.
CEO Chief Executive Offcer
CII Confederation of Indian Industry
CII is a non-government, not-for-proft, industry led and industry managed organization, playing a proactive role in India's development
process. It works to create and sustain an environment conducive to the growth of industry in India, partnering industry and
government alike through advisory and consultative processes.
CM Custom Manufacturing
CMIE Centre for Monitoring Indian Economy
CMO Custom manufacturing organization
CNS Central nervous system
COI Certifcate of OriginA Certifcate of Origin
(CO) is a document which is used for certifcation that the products exported are wholly obtained, produced or manufactured in India. It
is generally an integral part of export documents.
CoPP Certifcate of Pharmaceutical Product
CoPP is a certifcate issued by the national health authorities upon request from either the manufacturer, the customer or the
authorities in the importing country. The certifcate is issued for a specifc product and states whether or not the product is marketed
in the country of origin. Furthermore, it states that the manufacturer of the product complies with GMP and that they are inspected
regularly by the national health authorities.
CRAM Contract Research and Manufacturing
CS Custom Synthesis
CTD Common Technical Document
CTD is a set of specifcation for application dossier for the registration of Medicines. It was developed by the European Medicines
Agency (EMEA, Europe), the Food and Drug Administration (FDA, USA) and the Ministry of Health, Labour and Welfare (Japan). The
CTD is maintained by the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals
for Human Use (ICH)
Term Explanation
CTS Clinical Trial Supplies
CVD Cardio vascular disease
DCGI Drug Controller General of India
DMF Drug Master File
A drug master fle (DMF) is a master fle that provides a full set of data on an API.
DOP Department of Pharmaceutical
DPRP Drugs and Pharmaceuticals Research Program
DSIR Department of Scientifc & Industrial Research
EHS Environment, Health & Safety
EMEA European Medicines Agency
EMEA is a decentralized body of the European Union with headquarters in London. Its main responsibility is the protection and
promotion of public and animal health, through the evaluation and supervision of medicines for human and veterinary use.
FDA or
USFDA
Food and Drug Administration
FDA is a federal agency of the United States Department of Health and Human Services
FIPCO Fully Integrated Pharmaceutical Company
FIPNET Fully-Integrated Pharmaceutical Network
FTE Full time equivalent
GCP Good Clinical Practice
GDP Gross Domestic Product
GERD Gross Expenditure on R&D
GMP Good Manufacturing Practices
GSK GlaxoSmithKline Pharmaceuticals Ltd
HRD
Ministry
Ministry of Human Resource Development
HS Hit Screening
HTS High throughput screening
I&I Immunology & infammation
IDI Industrial Development Income
IND Investigational New Drug
IND program is an application to the US FDA by which a pharmaceutical company obtains permission to ship an experimental drug
across state lines (usually to clinical investigators) before a marketing application for the drug has been approved.
IP Intellectual Property
IPO Initial Public Offering
IT Information Technology
J&J Johnson & Johnson
JV Joint Venture
LI Lead Identifcation
LO Lead Optimization
M&A Merger & Acquisition
mAbs Monoclonal antibodies
MHRA Medicines and Healthcare products Regulatory Agency
The MHRA is an executive agency of the Department of Health. It is responsible for ensuring that medicines and medical devices work,
and are acceptably safe.
Taking wings 102
Term Explanation
MIT Massachusetts Institute of Technology
MNC Multi National Company
MOU Memorandum of Understanding
NCAER National Council for Applied Economic Research
NIPER National Institute of Pharmaceutical Education and Research
NISTADS National Institute of Science, Technology and Development Studies
NME New Molecular Entity
NMITLI New Millennium Indian Technology Leadership
NOC No Objection Certifcate
NRA National Regulatory Authority
OPPI Organization of Pharmaceutical Producers of India
OPPI established in 1965, is a premier association of research based international and large pharmaceutical companies in India.
It caters to the needs of Research based Pharmaceutical Industry thereby creating and sustaining an environment conducive to
innovation and growth, simultaneously, facilitating industry and stakeholders partnership through various advisory and consultative
processes to achieve the Healthcare objectives of the Nation.
Para IV Paragraph IV flingA Para IV
Filing is made when the ANDA applicant believes its product or the use of its product does not infringe on the innovator's patents listed
in the Orange Book or where the applicant believes such patents are not valid or enforceable.
PC&D Process Chemistry and Development
PCB Preclinical Biology
PCD Preclinical Development
PhRMA Pharmaceutical Research and Manufacturers of America
PhRMA, founded in 1958, is an industry trade group representing the pharmaceutical research and biotechnology companies in United
States
PKDM Pharmacokinetics and Drug Metabolism
PMC Post-marketing commitments
PR&D Process Research and Development
QA Quality Assurance
R&D Research & Development
SA Safety Assessment
SEZ Special Economic Zones
ST Scale up and Transfer
THSTI Translational Health Science and Technology Institute
TRIPS Trade Related Aspects of Intellectual Property Rights
The Agreement on TRIPS is an international agreement administered by the World Trade Organization (WTO) that sets down minimum
standards for many forms of intellectual property (IP) regulation.
UK United Kingdom
USD US Dollar
WHO World Health Organization
WHO is a specialized agency of the United Nations (UN) that acts as a coordinating authority on international public health. It is
responsible for providing leadership on global health matters, shaping the health research agenda, setting norms and standards,
articulating evidence-based policy options, providing technical support to countries and monitoring and assessing health trends.
WoS Web of Science
About OPPI
OPPI mission
To make continuing contribution towards achieving healthcare objectives of the nation while professionally addressing the collective
interests of its members and encouraging innovation for inclusive growth.
Organisation of Pharmaceutical Producers of India (OPPI) established in 1965, is a premier association of research based international
and large pharmaceutical companies in India and is also a scientifc and professional body. It caters to the needs of Research based
Pharmaceutical Industry thereby creating and sustaining an environment conducive to innovation and growth, simultaneously,
facilitating industry and stakeholders partnership through various advisory and consultative processes to achieve the Healthcare
objectives of the Nation.
OPPI Members Follow:
Good Manufacturing Practices (GMP)
International Code of Pharmaceutical Marketing Practices
OPPIs position on Intellectual Property Rights (IPR)
OPPI functions mainly on the following areas:
Continuous dialogue with the stakeholders
Actively engage in knowledge creation & knowledge sharing with value addition
Engage in Corporate Academia Interaction
OPPI identifes itself with the countrys national healthcare objectives and encourages its members to make substantial contributions
to social concerns and actively promotes Corporate Social Responsibility (CSR).
OPPI is an active member of International Federation of Pharmaceutical Manufacturers Associations (IFPMA), Geneva.
Contact
Peninsula Chambers, Ground Floor,
Ganpatrao Kadam Marg,
Lower Parel,
Mumbai 400 013.

Tel: +91 22 24918123, 24912486, 66627007
Fax: +91 22 24915168
E-Mail : indiaoppi@vsnl.com
Taking wings 104
Notes
Notes
Taking wings 106
Our offces
Ahmedabad
2nd foor, Shivalik Ishaan
Near CN Vidhyalaya
Ambawadi
Ahmedabad - 380 015
Tel: + 91 79 6608 3800
Fax: + 91 79 6608 3900
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UB City, Canberra Block
12th & 13th foor
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Tel: + 91 80 4027 5000
+ 91 80 6727 5000
Fax: + 91 80 2210 6000 (12th foor)
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Chennai - 600 018
Tel: + 91 44 4219 4400
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Golf View Corporate Tower B
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Fax: + 91 22 2282 6000
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15th foor, Nariman Point
Mumbai - 400 021
Tel: + 91 22 6749 8000
Fax: + 91 22 6749 8200
Jalan Mill Compound
95 Ganpatrao Kadam Marg
Lower Parel
Mumbai - 400 013
Tel: + 91 22 4035 6300
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New Delhi
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Tel: + 91 11 4363 3000
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Pune - 411 006
Tel: + 91 20 6601 6000
Fax: + 91 20 6601 5900
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EYIN0907-116 Taking wings.indd (India).
Artwork by Amit Malhotra and Mukul Dhingra

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Taking wings

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