India's contract drug makers seek government support in China fight

HYDERABAD Feb 27 (Reuters) - India's contract drug makers have urged the government to remove regulatory hurdles and grant faster clearance to vital raw material imports at a time when many global pharmaceutical firms are counting on the nation to reduce their reliance on China.
India's Contract Research Development and Manufacturing Organisation (CRDMO) sector is at an inflection point, with the potential to grow seven-fold to $22 billion-$25 billion by 2035, according to a report by Boston Consulting Group.
Globally, the market stands at $140 billion-$145 billion.
"The government has to understand that this industry has potential, if not scale, right now," Krishna Kanumuri, CEO and managing director at Sai Life Sciences (SAIE.NS), opens new tab, said at an event earlier this week.
India's contract drug manufacturers have gained from global companies' efforts to diversify their supply chain after the pandemic and a U.S. bill that would prohibit federal contracts with certain Chinese biotech firms on national security grounds.
However, India's policies are yet to play catch-up.
For instance, prolonged approval times and regulatory demands tied to certain raw material imports meant Indian firms often require eight to 15 days to initiate projects, while their Chinese peers could do it within three days, according to Vikash Aggarwala, MD and Partner at BCG's healthcare practice.
Industry insiders pushed for more business-friendly policies in the world's fifth-largest economy, which is heavily dependent on China for drug-related raw materials.
Piramal Pharma's (PIRM.NS), opens new tab Chairperson Nandini Piramal lamented the lack of customs warehouses at the right locations and related logistics costs, a dearth of cold storage units, and delays tied to the clearance of certain raw material imports.
"All of those, I think, add more friction to the ease of doing business," Piramal told Reuters.
Some others highlighted the delay in approvals due to the lack of a centralized, digital, single-window clearance system.
Syngene's (SYNN.NS), opens new tab CEO-designate Peter Bains said the "friction and delay" could be compressed, highlighting it was "a disadvantage that India has against other jurisdictions".
India's health and finance ministries did not respond to Reuters requests seeking comment.
The country, which offers cheap labour and a large talent pool, has already invested over $2.86 billion in the local biotech industry, according to the BCG report. But industry insiders are urging for more.
"I would really pitch for a CRDMO park... with policies where you don't have to go and get permissions from the local drug controller for making changes, where there are easy export and import capabilities," Aragen Life Sciences CEO Manni Kantipudi said.

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