Posted by : Nitesh Bhele

On : 03 June 2014

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Views : 1738


     CRAMS (Contract Research and Contract Manufacturing) pertains to outsourcing services/ products from low-cost providers with world class standards, in line with international regulatory norms like the USFDA, Australian-TGA, UKMCA, and EMEA. Pharmaceutical MNCs have traditionally been outsourcing intermediates, API's and formulations and over the last few years, the need to outsource has increased considerably. The next decade will be crucial for global Pharmaceutical companies, as many of the top selling drugs go off patent and the pharmaceutical industry frantically looks for new molecules. There is an ever increasing demand for New Chemical Entities (NCEs) and Investigational New Drugs (INDs). This is acting as a growth driver for the contract research organizations. The global pharmaceutical outsourcing market was worth USD 58 billion in 2009 and USD 67 billion in 2010, at a CAGR of 15% for 2007–2010 periods. It is expected to grow up to USD 95 billion by 2015.

CRAMS can be split into two major business segments—Contract Research and Contract Manufacturing. Activities in contract research predominantly consist of drug discovery, preclinical and clinical research, while contract manufacturing includes pre-formulation, formulation development, stability studies, method development, formal stability, scale-up, registration batches and commercial production. The organization that provides support to the pharmaceutical, biotechnology, and medical device industries in the form of research services outsourced on a contract basis called as Contract Research Organization (CRO), while organization that serves the pharmaceutical, biotechnology industry and provides clients with comprehensive services from drug development through manufacture called as Contract Manufacturing Organization (CMO).

Advantage India

India, as a country, offers certain competitive advantages over countries like China and East European countries. It has skilled and English speaking human power, a strong manufacturing base with the track-record of producing quality products, rich biodiversity and a structured legal and regulatory system. India has over 546 USFDA-approved company sites and 857 companies holding market authorisations with UKMHRA. Cost of production in India is nearly 60 per cent lower than that of the US and almost half of that of Europe and Labour costs is 50–55 per cent cheaper than in Western countries. However Indian pharma companies should focus on state-of-art process and production technologies to support rapid commercial production. Chemical synthesis constituted 60% of the total outsourcing market by CMOs in India, followed by formulation and packaging, which constituted about 40%. The CRAMS market in India is estimated to reach USD 8.5 billion in 2015.




According to reports, drugs over USD 90 billion are expected to go off patent globally by 2015 and the companies are looking out for cost effective outsourcing solutions to remain unaffected.  Indian companies providing contract manufacturing services are expected to garner approximately 30-40 percent of this opportunity. The pre-patent regime in India gave an impetus to the existing reverse engineering skills of Indian pharmaceutical companies. Contract research and manufacturing services (CRAMS) is a fragmented market with more than 1,000 players. CRAMS industry is estimated to have reached USD 8.5 billion in 2015, up from USD 3.8 billion in 2010. It is expected to grow 13.2 percent between 2012 and 2016.


The Indian contract research industry has grown tremendously over the past few years with more than 70 clinical research organisations and central labs. Local CROs providing the full spectrum of services are Vimta Labs, which is India’s largest provider, Asian Clinical Trials (ACT) and ClinInvent Research, headquartered in Mumbai. Clinigene International in Bangalore is a Biocon subsidiary and specialises in clinical trial, regulatory and accredited central reference laboratory services. Siro Clinpharm, Mumbai offers clinical services, data management, clinical quality assurance and regulatory consultation. Healthcare companies are foraying into the contract research and site management space to leverage the synergies that emanate from having a hospital chain. Fortis Healthcare has become the latest entrant in contract research with its Fortis Clinical Research Services. Apollo Hospitals’ site management organization – Apollo Spectra Research Foundation – has been managing clinical trials for some years now and the Max group, owner of Max chain of hospitals, has a contract research organization called Neeman Medical International.


Key Growth Drivers

Key growth drivers for the business of CRAMS in India are increasing demand for NCEs and INDs, need for speedy and low cost R&D, patenting requirements and manpower developments. While industry is growing there are some major issues and challenges pegging the current companies. Non-availability of skilled manpower, growing global competition, MNCs setting up captive CROs and manufacturing units in the country, manufacturing norms in Indian system of Medicines are worth to be noted. Global MNCs are enhancing the scope of outsourcing their operations in research and manufacturing to their Indian subsidiaries. Companies make use of their local medical departments or subsidiaries for monitoring clinical studies. Aventis, Eli Lilly, Novo Nordisk and Wyeth are using their affiliate medical departments for conducting global clinical studies.



One of the primary challenges is global competition. India is now facing increasing competition also from other Asian countries like China, Russia, Brazil and Taiwan. Big pharma MNCs are setting up their facilities in India. Though, India has enforced patent laws, there is still lingering discomfort among few companies, particularly small biotech’s, with working in India. In case of regulations India has lots of hurdles as a result the situation is delaying inordinately. For clinical research it is required to take due approvals from the Drug Controller General of India (DCGI) at different stages.  The entire process is delayed.  This has created long backlog and delays. This ultimately creates a lot of uncertainty, which is a regulatory challenge.


Future of CRAMS

Future of CRAMS is very  bright because generally big  pharma companies due to  various reasons, whether  it is cost, environment or  supply of special skills, they  have been moving away  from manufacturing and  choose to outsource it to  India. Hence, in contract manufacturing, especially small molecules, the future continues to be bright and lot of work is coming to India. In bio manufacturing it is still early days because the cost differences is not there. But over a course of time even that will develop.  And further in clinical trials,  there is potential but then  it has not yet been fully  realised due to delays and  other aspects. The areas that need to have focus are new chemical  entity research, biosimilar  research, and biosimilar  manufacturing. Therefore, these would be few of the  areas that we need to continue  developing on.


CRAMS players would like to position themselves as  a one stop, full service provider. In this, they position  as a Solution CRO as well as Process CRO. The work  may        be well-defined           and      easily   repeated,            making            it          amenable to a Process CRO, or it may be hypothesis  driven, requiring experimentation and suited for a  Solution CRO. However, pharma companies are  showing interest in this integrated approach instead  of multiple CRO organisations for each of their  outsourcing needs. A Solution CRO must be used  in the candidate nomination and early development  timeframe to develop the methods and processes  that will become routine. At that point, it is logical that a Process CRO is used to manufacture API and drug product and perform the non-clinical and early clinical evaluation. By this one stop full service provider   model, the            operational     teams  will benefit      from understanding the different types of business models that will facilitate these interactions.


Making APIs and oral solid formulations (tablets and capsules) will continue to be the major source of revenue for India’s contract manufacturing industry in coming years. India, with its inherent competitive advantages, stands as one of the most preferred outsourcing destinations for a range of activities and is now becoming a critical part of manufacturing and drug development value chain of various global innovator pharma. It is estimated that 50%-60% of the global clinical trials market will be outsourced to developing countries like India by 2015.  


Nitesh Bhele

Management Trainee at Zydus Cadila Healthcare Ltd.