Abhishek Bardhan, Director, Business Development, M+W Group, writes about the opportunities for the pharmaceutical industry in India to compete on a global stage
India has blazed a trail in developing home grown manufacturing centres and the bio-pharma sector is no exception. Prime Minister Narendra Modi flew the flag earlier his year at the Hannover Messe, the world’s largest industry and technology trade fair. The massive presence of Indian companies at the show heralded India as a country that established markets could do business with; insisting that he was committed to introducing a ‘predictable’ business environment in his country. It would seem that the promises made in his pre-election ‘Make in India’ campaign to promote the country as an investment destination and manufacturing centre is beginning to pay off — in a big way. His goal is to market India as an industrial hub for foreign players eager to take advantage of the country’s large workforce, raw materials and infrastructure. This is especially relevant for new technology industries led by pharmaceutical companies including some of the world’s biggest players — and importantly with Indian businesses is the vanguard of manufacturers positioned to develop not just home markets but also creating a global footprint.
Opportunities for pharma sector
The opportunities for win/ win in best practice and cost control for players in the pharma industry are substantial, especially in India. International businesses have been on the receiving end of a full on assault by the Indian government and an army of financial advisors and business strategists who had placed emerging markets — and India in particular — on the radar for serious investors, due to its impressive growth, strong democracy and developing standards as well as its high numbers of skilled staff. What’s more, India itself is fast tracking its presence on the global pharmaceutical manufacturing scene by deploying smart strategies.
According to figures cited by the Indian government, last year globally, the Indian pharma industry is ranked third largest in volume terms and tenth largest in value terms. The sector is highly knowledge-based and its steady growth is positively affecting the Indian economy. In addition to the relatively low cost-base, the organised nature of the Indian pharma industry is attracting several companies that are finding it viable to increase their operations in the country. In terms of value, exports of Indian pharma products increased at a CAGR of 26.1 per cent to touch $ 10.1 billion during FY06-13.
But, there are some issues that are putting the brakes on an otherwise impressive growth of the indigenous manufacturing base. Currently, the Indian pharma industry is highly fragmented with about 24,000 players (33 per cent in the organised sector). The top ten companies make up for more than a third of the market.
Already major manufacturers based in the sub-continent have flexed their muscles with a flurry of M&A activity, with clearance to enter North America. The US market alone accounted for nearly 30 per cent of India’s medicine exports of $15 billion in the fiscal year through March 2014.
Europe’s reputation for quality and precision finished products, and German engineering excellence in particular, is still the order of the day with emerging markets keen to learn from years of experience. In 2012, Europe’s pharma trade surplus was estimated at €80 billion.
The advantage that India has over other emerging markets is a plethora of highly skilled engineers and technology graduates providing a ready-made low cost labour market. They cover the most sophisticated of manufacturing processes from R&D to world-leading production regimes. This is in sharp contrast with Europe where the skills gap for engineers has placed a premium on such avenues as a precious resource.
Partnership key to BRIC economies
Times are changing, however, with emerging markets gaining a foothold. For many BRIC economies, the question is how they manage to compete on a world stage with the developed regions such as Europe. The answer is simple — through partnerships. Indian pharma manufacturers are leveraging the expertise and brand strength of European engineering organisations to build GMP and cleanroom facilities that provide the necessary environments for manufacturing of pharma that meet stringent FDA and WHO regulations across the globe.
The strength of the pharma market in India is gaining traction and growing with investments continuing to pour in, largely through mergers and acquisitions. With many Indian drug companies investing outside of India as well, confidence in the market is growing from both sides. The benefits for European engineering organisations to partner with Indian pharma manufacturers lies largely in the cost benefits. Due to availability of skilled labour, India has the ability to deliver cost efficient programmes. Pharma manufacturing projects can cost between 30 and 40 per cent of manufacturing projects in the US, a significant reduction in costs leaving cash left over for investment or future projects. One of the main reasons why India’s pharma market has catapulted to become a significant player is the amount of government support it has received. With the implementation of ‘PharmaVision 2020’ the Indian government is aiming at making India a global leader in end-to-end drug manufacture.
Leading clean room technology solutions provider M+W Products’ work with global clients is regarded by many industry insiders as the ‘go-to resource’ for innovation and leveraging competitive edge. One of the key challenges according to Bardhan is the lack of readily available advanced technology products for facilities, which are needed in order for India to deliver its pharma manufacturing at global standards. European engineering and products both have strong reputations of technology and engineering excellence, which pharma companies in India are cottoning on to in terms of the benefits of partnering with such organisations. There is an incredible amount of research and development already taking place in the Americas and across Europe. Rather than follow the same route yet remain 50 to 100 years behind many organisations, businesses are realising that a combined approach to building up the Indian pharma manufacturing industry is ideal. Furthermore, these partnerships help Indian pharma companies deliver global levels of safety and quality while adhering to the – FDA and GMP standards which are essential for their products to be acceptable globally.
Delivering solutions for Indian customers
The latest technological innovations related to cleanrooms show that development is still being pursued 50 years after the first cleanroom was developed, although much of the innovation deals with improved equipment for individuals working within a cleanroom environment. Michael Rodd, M+W Products Chief Sales Officer has together with Abhishek been a driving force in delivering solutions for Indian customers. He cites, for example, when considering clothes, everyone working in cleanrooms has to change frequently. This costs time and money. This has led to many asking the question: what if the clothing could remain clean throughout the entire process?
A potential solution being worked on is called ‘photodynamic disinfection’. With no negative impacts on the human body, photodynamic disinfection is a way to develop a highly disinfectant affect that destroys microorganisms in minutes. In order to achieve this, a suitable lighting technology is required which assures that light can penetrate into difficult areas of clothing such as folds or seams. This innovation is especially of interest for the food industry and medical facilities as well as cleanrooms.
Over the past year, the design and manufacturing of hygienic furniture has evolved to meet specific cleanroom requirements. There has also been a clear shift in the way laboratory users want their cleanrooms to be designed, not only to meet current needs, but to future proof them for years to come This has taken two distinct routes: the first is a generic module approach that is flexible; the second is tighter involving furniture being placed in precise locations. Whichever route is chosen, the finish is becoming just as important as the function. There is increasingly a focus on achieving a ‘showroom’ finish in cleanrooms. This could be down to demands for the best quality working environment. Also, the viewing windows enable laboratories and cleanrooms to clearly demonstrate to visitors that they are committed to quality and control.
Is biopharma the next big thing for manufacturers?
According to a report by consulting firm McKinsey & Company ‘Rapid growth in biopharma: Challenges and opportunities,’ as the number of products rises and new process technologies such as continuous manufacturing are introduced, the complexity of biopharma operations and the biopharma supply chain will increase. Evidence indicates that current production programmes are already stretching the industry, with several players failing to deliver to the market. This challenge will only increase as sites move from the current ‘one line, one product’ setup toward nimble and flexible multiple-product operations and are required to manage both current and future technologies under one roof.
The high premium on biopharma products and the relatively smaller share of revenues they have historically accounted for in big pharma companies have led to industry-wide challenges in the supply chain. Complexity, cost and service levels are far from small-molecule best practices, even considering the additional complexity of cold-chain requirements.
New classes of molecules, from drug conjugates to the cell and gene therapies arriving in the next five years, will each require its own novel manufacturing, supply and quality-assurance approaches. Today, many companies that are insourcing these products in the late clinical or early commercialisation phase are struggling to set up the novel technologies and processes required to produce them.
Cleanrooms are not your everyday purchase. They have a very specific purpose to control and remove contamination. In today’s technologically advanced world, the key now is in attempting to future proof the cleanroom. As we all know, technologies are advancing at such a fast pace that keeping up is becoming impossible. This is why innovators like M+W Products are looking to the future and how we can make the products used, as opposed to the infrastructure, as future proof as possible. For example, many vendors are making products and controls that will be key to enhancing flexibility and sustainability in cleanroom facilities, and many of these systems are getting so complex and subtle in terms of how they will react to the building and its technologies.
By concentrating efforts on the equipment and controls, we are able to continue innovating, and more importantly, improve efficiencies and saving costs. M+W Products’ experience in India is demonstrating that European/ Indian partnerships are proving beneficial to both sides.’