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India Contract Manufacturing Organization (CMO) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The India Contract Manufacturing Organization (CMO) Market is segmented by Service Type (API and Intermediates, Finished Dose).

Market Snapshot

India Contract Manufacturing Organization (CMO) Market
Study Period: 2019- 2026
Base Year: 2020
CAGR: 13.3 %

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Market Overview

The Indian CMO market is expected to register a CAGR of 13.3% during the period of 2021 - 2026. The rise in demand for injectable drugs, especially in cancer research, will upwardly trend the Indian pharmaceutical contract manufacturing market. Injectable drugs offer higher returns as compared to other drug formulation types. Therefore, higher ROI and therapeutic efficiency are expected to fuel the growth of the injectable formulation segment in the country.

  • Over the past few decades, India has taken a major leap from pharmaceutical production to include contract manufacturing. As per Indian Drug Manufacturers' Association, the pharma CMO industry is providing a significant opportunity for small and medium enterprises.
  • In basic manufacturing of medical drugs and products, India has a superior edge over nations, such as Vietnam, China, and Ireland, due to resources including manpower, technically knowledgeable workforce, and WHO-GMP approved production premises.
  • The scale-up of drug synthesis and late clinical trials have become a suitable protocol in the country. Along with it, DTAB (Drug Technical Advisory Board) has also agreed to grant wavier to the late stage (Phase III) studies of certain drugs in the country, which are from the regulated markets of the US and Europe. These incentive step translates into enormous cost savings for pharmaceutical companies, thereby increasing their focus on India.
  • During the Covid pandemic, several initiatives were taken by the Union Cabinet to boost the pharma industry, which includes the amendment of the existing Foreign Direct Investment policy to allow FDI to invest up to 100 percent under the automatic route for manufacturing medical devices subject to certain conditions.
  • Additionally, several Indian pharmaceutical companies have been working in order to develop or manufacture at least eight anti-Covid-19 formulations as one of the world's largest producers of vaccines is preparing for a massive response to the COVID-19 pandemic. For instance, the Serum Institute of India (SII), which is one of the largest vaccine producers, was manufacturing AstraZeneca's Covishield and another formulation that US rival Novavax Inc developed.​
  • Moreover, the country is a significant exporter of pharmaceutical solutions. For instance, the United States relies on India to import services and establish its plants in the country. A substantial 40% lower cost of operation and production is why multinational companies consider India for their outsourcing requirements. With the advent of global pharmaceutical organizations, and their rapidly growing presence in India, the concept of contract manufacturing has steadily evolved and quickly adapted to encompass services, such as formulation development, basic manufacturing of medicinal products, stability studies, and various stages of clinical trials.

Scope of the Report

Over the past few decades, India has taken a major leap from pharmaceutical production to include contract manufacturing. In basic manufacturing of medical drugs and products, India has a far superior edge over nations, such as Vietnam, China, and Ireland, due to resources including manpower, technically knowledgeable workforce, and WHO-GMP approved production premises. Further, the demand for CMO service includes API & Intermediates and Finished Dose services.

By Service Type
API and Intermediates
Finished Dose
Solids
Liquids
Semi-Solids and Injectables

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Key Market Trends

Generic Medicine Under Solid Finished Dose Segment Holds the Significant Share in The Market

  • The solid dose formulation segment is mainly dominating the finished dose segment in India, owing to lower manufacturing costs, patent compliance, and ease of maintenance. Solid dosage forms, such as tablets, pills, capsules, powders, etc., are among the most adopted products in the country. The growth of generics drugs is one of the major factors driving the growth of the segment, and India is the largest exporter of generic drugs and accounts for approximately 20% of global exports by volume.
  • The players catering to the market are looking to strengthen their competitiveness through various growth strategies, such as investments into new production facilities and acquisitions and mergers. For instance, in Jun 2020, Piramal Enterprises Limited, a prominent CDMO player, announced an agreement with G&W Laboratories Inc. to acquire the latter's solid oral dosage drug product manufacturing facility located in Sellersville, Pennsylvania.
  • Furthermore, the Indian pharmaceutical companies are leading the way in developing generic drugs in Mexico, and they are investing heavily in the country. Further, in October 2020, Six Indian generics makers have signed letters of intent with the state of Hidalgo, Mexico, to establish a pharma hub for manufacturing and logistics. The targeted drugmakers such as Dr. Reddy's, Zydus Cadila, Glenmark, Torrent, and Hetero will access a USD 10.6 billion Mexican drug market.​
  • Also, new global opportunities are being made by generic manufacturers producing modified versions of approved off-patent small-molecule drugs. These so-called 'super generics offer a therapeutic advantage, distinguishing them from conventional generic drugs. For instance, India-based Ranbaxy Laboratories developed a once-a-day ciprofloxacin tablet and licensed it to Germany-based Bayer AG.
India Contract Manufacturing Organization (CMO) Market

Drugs and Pharma Exports in United States Account for Significant Market Growth

  • Indian drugs are exported to more than 200 countries in the world, with the US being the key market. According to RBI, the Indian pharmaceutical sector contributes about 2 percent to India’s GDP and around 8 percent to the country’s total merchandise exports.
  • Generic drugs account for 20% of the global export in terms of volume, making India the largest provider of generic medicines globally. In the covid phase, India’s drugs and pharmaceuticals exports stood at USD 3.76 billion between April 2021 and May 2021 (source: IBEF).
  • Global private equity (PE) investors are in a rush to bet on Indian firms that are in the thriving business of manufacturing active pharmaceutical ingredients (API), vaccine-related manufacturing, and producing bulk pharmaceutical chemicals. For instance, in July 2020, US-based Advent International agreed to acquire a controlling stake in RA Chem Pharma from its parent Micro Labs, while another US-based giant, KKR, also agreed to acquire a 54% stake in JB Chemicals and Pharmaceuticals for USD 611 million.
  • As per the department of commerce estimates for FY-21, North America is the largest exporting region for India, with more than 34 percent share. Wherein the country-wise exports to USA, Canada, and Mexico recorded growth of 12.6 percent, 30 percent, and 21.4 percent respectively.
India Contract Manufacturing Organization (CMO) Market

Competitive Landscape

The India Contract Manufacturing Organization (CMO) market is fragmented, with the top vendors accounting for a significant share of the total market. Apart from these major players, there are several players in the market that are investing in innovation and partnership activities to gain an increased market share. Therefore, the intensity of competitive rivalry is high. Key players are Dr. Reddy’s Laboratories, Cadila Healthcare Limited, and Cipla Ltd., etc. Recent developments in the market are -

  • August 2021 - Cipla Limited and Kemwell Biopharma Private Limited, a biopharmaceutical Contract Development and Manufacturing Organization (CDMO) announced a joint venture agreement to develop, manufacture and commercialize biosimilars for global markets. Resultantly, a joint venture company would be incorporated to enter the respiratory biosimilars space. Under the terms of the agreement, the joint venture would leverage Cipla and Kemwell’s complementary strengths for end-to-end product development, clinical development, regulatory filings, manufacturing, and commercialization of biopharmaceutical products.
  • June 2021 - Eisai Co., Ltd. and Bristol-Myers Squibb Company announced a global strategic partnership agreement to develop and commercialize MORAb-202, an antibody-drug combination (ADC). MORAb-202 will be developed and commercialized jointly by Eisai and Bristol Myers Squibb under the terms of the agreement. Eisai would remain responsible for the manufacturing and supply of MORAb-202 globally.

Recent Developments

  • December 2020 - Viatris sponsored the ‘Panacea’ event in India along with Narayana Health, Ayush Society, with a view to improving focus on mental health improvement in India. It conducts series of virtual sessions on yoga, stress management, nutrition, and mental health to help patients overcome post-COVID-19 anxiety, fear, and mental trauma. Special sessions were conducted by renowned pulmonologists, neurologists, and cardiologists.
  • July 2020 - Viatris extended its partnership with Gilead to build COVID-19 treatments by announcing a global agreement with the company to commercial Remdesivir in 127 low- and middle-income countries. The drug was launched under the brand name DESREM in India. Viatris has a long-standing history of partnering with Gilead Sciences to tackle critical public health issues in India and worldwide, beginning with expanding access to high-quality, affordable HIV/AIDS antiretrovirals.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Industry Value Chain Analysis

    3. 4.3 Market Drivers

      1. 4.3.1 Availability of Skilled Labor at Relatively Lower Cost

      2. 4.3.2 Sustained increase in outsourcing volumes by big pharma companies

      3. 4.3.3 Geographical advantage in the form of access to large markets in the APAC region

    4. 4.4 Market Restraints

      1. 4.4.1 Propensity to opt for CMOs from the US and Europe continues to be a concern

    5. 4.5 Industry Ecosystem Analysis

    6. 4.6 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.6.1 Bargaining Power of Suppliers

      2. 4.6.2 Bargaining Power of Buyers

      3. 4.6.3 Threat of New Entrants

      4. 4.6.4 Threat of Substitute Products

      5. 4.6.5 Intensity of Competitive Rivalry

    7. 4.7 Impact of Covid-19 on the Pharmaceutical industry in India

    8. 4.8 Overview of the Global Pharmaceutical CMO Industry and major cues identified in the Indian market

    9. 4.9 Overview of major markets in the Asia Pacific region

    10. 4.10 Major Hotspots for CMO Facilities in Maharashtra and Telangana

    11. 4.11 Recent private equity investments in the CMO industry in India

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Service Type

      1. 5.1.1 API and Intermediates

      2. 5.1.2 Finished Dose

        1. 5.1.2.1 Solids

        2. 5.1.2.2 Liquids

        3. 5.1.2.3 Semi-Solids and Injectables

  6. 6. STRATEGIC RECOMMENDATIONS ON INDIA CMO INDUSTRY

    1. 6.1 India remains a highly proposition for new vendors planning to set up their CMO facilities, specifically in the injectables domain mainly due to growth in domestic demand and generics drugs

    2. 6.2 Cost advantages and access to talent pool

    3. 6.3 Regulatory approval pipeline and base case scenarios

    4. 6.4 Analysis of potential M&A targets in India

  7. 7. COMPETITIVE INTELLIGENCE

    1. 7.1 Company Profiles

      1. 7.1.1 AMRI India Pvt. Ltd.

      2. 7.1.2 Dr. Reddy's Laboratories

      3. 7.1.3 Cadila Healthcare Limited

      4. 7.1.4 MSN Laboratories Pvt Ltd.

      5. 7.1.5 Viatris Inc (Mylan Laboratories Ltd)

      6. 7.1.6 Medipaams India Pvt Ltd.

      7. 7.1.7 Cipla Ltd.

      8. 7.1.8 Eisai Pharmaceuticals India Pvt Ltd.

      9. 7.1.9 Delwis Healthcare Pvt Ltd.

      10. 7.1.10 Maxheal Pharmaceuticals India Ltd.

      11. 7.1.11 Rhydburg Pharmaceuticals Ltd.

      12. 7.1.12 Theon Pharmaceuticals Limited

      13. 7.1.13 BDR Pharmaceuticals International

      14. 7.1.14 Akums Drugs and Pharmaceuticals Limited

      15. 7.1.15 Wockhardt Limited

      16. 7.1.16 Unichem Laboratories Ltd.

      17. 7.1.17 Ciron Drugs & Pharmaceuticals Pvt Ltd

    2. *List Not Exhaustive
  8. 8. MARKET OUTLOOK

**Subject to Availability

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Frequently Asked Questions

The India CMO Market market is studied from 2019 - 2026.

The India CMO Market is growing at a CAGR of 13.3% over the next 5 years.

Dr. Reddy’s Laboratories, Cadila Healthcare Limited, MSN Laboratories Pvt Ltd, Cipla Ltd., Akums Drugs and Pharmaceuticals Limited are the major companies operating in India CMO Market.

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