The average drug manufacturing utilisation rate in India is roughly 75 per cent across both active pharmaceutical ingredients (APIs) and formulation production facilities. This means 25 per cent of the capacity goes unused due to the inherent variability in processes, according to global advisory services firm EY.
“The Indian pharma industry boasts of a strong network of 10,500 manufacturing sites. However, most of these plants use traditional batch manufacturing processes resulting in longer production times and increased chances of error due to high human intervention. Inefficient manufacturing costs the industry millions of dollars every year according to an industry bench mark report. Effective utilisation is an area for improvement, which can alter the way companies avoid unnecessary capex,” EY said in a report titled ‘Today for tomorrow: realising the potential of Life Sciences 4.0’ released at the BioAsia 2020 conference on Monday.
As per EY estimates, on an average, 15-20 per cent capacity can be released through initiatives such as reducing cycle time variability, quality check turn-around time, changeover, lead times, etc. EY says the Indian companies need to understand how new technologies may change their business both in areas of product innovation and manufacturing practices as they prepare to shift from supplying commodities to supplying innovations.
“Life Sciences 4.0 is all about the ability of the life sciences companies to strategically move from one stage of business maturity to another at the right time and with the right capabilities. Indian companies may be behind their global peers, but they have the advantage of learning from global failures and successes,”EY India national health services sector leader Sriram Shrinivasan said.
India is the largest provider of generic drugs globally, fulfilling about 40 per cent of the generics demand in the US and roughly 25 per cent of all medicines in UK. The country is also the supplier of over 50 percent of global demand for vaccines and 80 percent of global demand for antriretroviral drugs for AIDS. However the market is becoming difficult due to factors such as intense competition, buyer consolidation and increasing regulatory scrutiny. As a result, there are potential pressures on both revenue and margins, according to EY report.
As Indian companies continue to expand both their geographical footprint and their capabilities outside simple generics, it is essential that quality and compliance are embedded in the overall growth strategy, it says.
The US Food and Drug Administration’s (US FDA) inspection citation dataset suggests the top issues in 2019 pertained to the failure to investigate the discrepancies and inability to follow the written procedures. These citations are indicative of the need to set up a robust system to document all the processes and data, the report said.
The report advised the companies to shift from manual, people-dependent processes to automated systems to minimise human errors. The digital quality management system (QMS) can integrate the entire product value chain, serving as a single version of truth for the entire organisation, it said.
Talking about the product innovation efforts, the report said the country’s pharma industry has already embarked on its journey towards launching innovator molecules. “Almost all top companies are gradually stepping up the product value chain, which is reflected in their recent R&D spend and focus areas. As per EY’s analysis, the average R&D spend by some of the top Indian pharma companies increased from 5.9 percent of sales in FY 10 to about 8.8 percent during FY 18,”it said.
Citing the increased biosimilars pipeline of the domestic companies, the report stated that India was likely to capture about 8 percent of the global $62 billion biosimilar market by 2025. The report also pointed to the rising focus on personalisation of therapies such as cell and gene therapies- a new area of opportunity for Indian companies.
Quoting its survey involving 20 industry experts of top Indian pharma companies, EY said most Indian companies were already beyond the digital inertia stage as they understand the necessity to adopt digital technologies to remain relevant and competent in the future.-Business Standard