Slowly but steadily, Indian oral solid dosage form manufacturers are making their way through in the global markets”, even as rising competition and falling prices continue to haunt generic companies. The oral solids business is, in fact, heading to a high growth trajectory, indicate market reports. A recent Frost & Sullivan study forecasts a potential of seven- to eight-fold growth in Indian oral solids contract manufacturing in the next five years. Growing at an annual rate of 34%, solid dosage formulation market is expected to pass the $1 billion mark by 2013, despite posting a mere $152 million in 2006.

Oral solids (OSF) constitute the lion’s share in pharmaceutical formulations as they are the most popular and convenient method for drug delivery. Tablets, capsules, pellets/granules and powders are produced in a non-sterile environment with the technology well known after more than 100 years of development. Therefore, they are the least expensive ones too.

The Frost & Sullivan report says that nearly 70% of Indian CMOs in formulation segment are involved in OSF business and hence it is a major contributor to their contract manufacturing revenue. Nicholas Piramal Pharma, Jubilant Organosys, Micro Labs, Zydus Cadila, Dr Reddy’s, Wockhardt, Hetero Drugs, Medipharm are among the leading players in this space.

Backward Integration — Another Edge

“You can’t be a successful Contract Research and Manufactur-ing Services [CRAMS] player if you don’t have oral solid manufacturing business [in your portfolio offering],” pointed out Mr. Ajit Mahadevan, president and head — Formulations, Custom Manufacturing Division, at Nicholas Piramal India Ltd (NPIL). This leading custom manufacturer from Mumbai currently serves about a dozen global pharma majors in OSF development. NPIL consolidated its presence OSF segment following its acquisition of Pfizer’s Morpeth (UK) facility in 2006. With an aggregate yearly formulation capacity of three billion tablets, 500 million low RH (<8%) tablets, 270 million hard gelatin capsules, the Morpeth site routinely supplies more than 300 finished dosage forms to more than 100 markets including the U.S., Europe and Japan.

NPIL Pharma aims to be the market leader in preformulation and formulation development to clinical manufacture of capsules, liquid-filled hard gelatine capsules, tablets etc., by 2010. The company’s formulations package includes API pre-formulation services, formulation development for clinical trial manufacturing and scale-up to commercial manufacture in finished dosage forms. NPIL Pharma presently has annual custom manufacturing revenues of more than $250 million that includes roughly $100 million from formulations.

The Indian pharma market is predominantly driven by dry formulations. That explains why almost every drugmaker has a stake in OSF segments (including controlled release forms). Better quality of services, capability to meet cGMP norms set even by world’s most stringent regulatory bodies, and a good technical pool are considered factors working in favor of Indian OSF producers, in addition to lower costs. India has 80-odd U.S. FDA- and MHRA-audited manufacturing facilities and the majority of them are engaged in OSF production.

Another factor that makes India a favored OSF source point is that some of these players are having the ability to integrate backwards to APIs. Shasun Chemicals, which recently secured FDA approval for its OSF plant in Puducherry, is an example. Shasun has earned repute as a prominent player in API manufacturing. With this new approval, the south Indian mid-cap expects to make a foray into the world’s largest OSF market with its first tranche of finished products by the second half of 2008. Several such CMOs traditionally engaged in the API sector are reportedly in the process of moving into formulations.

Call for Change

Despite high penetration of cost-effective technologies across the sector, India’s share in global formulation contract manufacturing remains very little, points out Mr. Hitesh Gajaria, executive director, KPMG India, an analyst firm based in Mumbai.

However, this could dramatically improve, say observers. “India can become a leading player by timely investments in infrastructure and technologies targeted at precise control of manufacturing technologies,” says Dr. Arvind K. Bansal, associate professor (Formulations), National Institute of Pharmaceutical Education and Research (NIPER), the country’s premiere research institute on pharmaceutical technology. He thinks firms can focus niche areas like early clinical trial formulations meanwhile looking for high-end technologies and Process Analytical Technology (PAT) initiatives.

Generally, analysts concur with Frost & Sullivan view that the OSF business in India could well be headed for a churn in the near term. Pharmaceutical companies worldwide are currently in overdrive to outsource drug-making processes as a measure to contain mounting cost burden. Indian firms can play significantly in addressing manufacturing costs and, to some extent, the development time cycle by speeding up the availability of dosage forms.

S. Harachand is a pharmaceutical journalist based in Mumbai.