Drugs & Updates

Changing Landscape In Indian Pharma Companies

Indian Pharma companies are looking at a sustainable growth opportunity in the coming decade as the lack of differentiation in Generics has chipped away at margins due to increased competition.

While companies with a large US Generics exposure are looking at niche opportunities like Complex Generics/Specialty drugs, Contract Research and Manufacturing Services (CRAMS) for API/Formulation has emerged as a successful opportunity for companies with a sound technical, manufacturing, and regulatory expertise. The branded Domestic Formulation space remains a high return ratio segment, with a moderation in growth, excluding COVID-19, due to the reduced burden of Acute diseases.


CRAMS has emerged as a niche segment, offering a high growth potential. The global CRAMS segment is expected to clock 6.2% CAGR over CY21-26E to touch ~USD170b. Biologics-based CRAMS is expected to witness 11% CAGR over CY20-26E, led by ever-rising number of products under development for targeted action and limited manufacturing skill set of respective companies. With ~6,000 molecules in the pipeline, ‘small molecules’ constitute a dominant share within the CRAMS segment.

With the ease of access to capital for emerging Pharma companies, there is a surge in Biopharma companies focusing on R&D and outsourcing manufacturing at the research/commercial level. This, along with cost consciousness of larger Pharma companies, is providing a fillip to this segment. Indian CRAMS players are uniquely positioned to outperform the industry in this segment.

After sales declined to USD56b in CY19 from USD66b in CY16, the Generics industry in the US clocked a steady YoY growth in CY20. The improved launch pace was sufficient enough to counter the price erosion in the base business. However, the annual pace of filings has slowed to ~800/230 in FY21/4MFY22 from more than 1,000 in FY17. This is partly due to increased filings for complex products and COVID-related hurdles. Indian companies are working on different strategies such as: a) building Complex Generics, NCEs (New Chemical Entity), and branded Generics, or b) in-licensing/partnering to augment capabilities.

Most potential products are spread over the development/approval stage, and are sometime away from commercialization. This has made companies vulnerable to higher competition in their base generics business.


Global API sales are expected to exhibit ~6% CAGR over CY21-26E to touch USD259b (v/s 3.6% CAGR witnessed over CY18-20), given the rising prevalence of Chronic disorders and growing development trend in innovative therapeutic drugs. In addition to increasing demand and re-consideration of the API source by formulators, shutdown of API factories in China is expected to drive better business opportunities for Indian API companies. As a result, the Indian API sector is expected to outperform other countries, with an estimated CAGR of 9.6% over CY21-26E.


  1. The API segment in India is in a sweet spot, with rising demand for novel therapeutics as well as a reshuffle in the share of Chinese manufacturers.
  2. Shutdown of manufacturing facilities on account of environmental concerns is driving business opportunities for Indian API manufacturers.
  3. The focus on Complex Formulations from innovators and Complex Generics by generic Pharma companies is expected to drive faster growth for Complex APIs.


CDMO is the most promising segment in the Pharma space. Indian companies are building their skill set to cater to Biologics and Synthesis-based CDMO. With a spurt of emerging Biopharma companies, developing ~3,500 recombinant proteins/antibodies and having limited manufacturing capabilities/capacity, it provides the right ingredient to partner with CDMO companies. Small molecules are still a dominant play in the CDMO segment, with ~6,000 molecules in the pipeline providing business opportunities across the value chain of product development to commercial manufacturing.


Generic Pharma companies are focusing on differentiated product offerings to navigate higher competition in the Generics space in the US. Indian Pharma companies have a presence in different categories of Complex products

Source : Industry Reports, Motilal Oswal Research Report


Dr Shilpa Subramanian

Dr. Shilpa Subramanian is a MDS, Periodontist and currently manages Global Pharmacovigilance and Medical Affairs Operations at a Healthcare company in Mumbai. She is passionate about staying ahead of the curve in clinical and non-clinical advances in the field of pharma and healthcare.

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