About Author: Dr Kiran Marthak, Director – Medical Affairs, Phase-1 and Regulatory Affairs, Veeda Clinical Research Limited is one of pioneering leaders in the Indian clinical research industry, with rich experience of more than four decades. Dr Marthak has held senior positions in several Indian and global pharmaceutical companies such as Ciba – Geigy (Novartis), GSK, Pfizer and Ranbaxy. He is one of the accredited members for GCP training by Clinical Development Services Agency (CDSA), India and contributed to the New Clinical Trial Rules implemented in March 2019.
The ever-growing Contract Research Services (CRO) market in India has come a long way in establishing the credentials of being a globally accepted service-oriented industry that delivers promise of quality, compliance and timeliness in its research deliverables. Amongst the rising cost of R&D in the drug development journey, India is now a global destination for pharma companies with the availability of right scientific talent, use of technology in clinical trials and expertise in cracking of research code of drugs across different therapeutic areas.
The research-focused services, offered by CROs, encompass all phases of the drug development lifecycle, from compound selection, discovery, preclinical (pre-human in-vitro and in-vivo) research, clinical (in-human) testing, as well as post-approval functions such as commercialization, safety assessment, monitoring, and consulting, among other services.
Exhibit: Drug Development Life Cycle: Timeline for New Drug Approvals, as per US FDA
CROs manage the entire drug development process of pharma companies, and given the Indian CROs’ global scale and therapeutic expertise, they are often able to do so more cost effectively and with a shorter time-to-market than in-house research and development departments at pharmaceutical companies.
Post pandemic, Indian Contract Research Organizations have re-engineered their resources to cater and tap the increasing demand of research from the drug development companies in North America and Europe. With quicker time-to-market models, CROs are now positioning themselves as end-to-end solution providers making their services more cost effective, time saving and offering services across the value chain. CROs are consolidating their operations by resorting to M&A activities to gain access to specific service portfolios, such as preclinical development and bio-analytical testing.
Indian CRO market captures about 3% of the global market share by value, estimated at USD 2 billion in 2021 and is expected to grow with a CAGR of about 12% till 2026. The recent favourable changes in the Indian regulatory landscape for the CRO industry, higher acceptability of India as an outsourcing destination by the global pharmaceutical companies and favorable demographics in terms of cost, technical skills and diversity of volunteers required for trials are driving the Indian CRO market.
“Indian CRO market is estimated at USD 2 billion in 2021 and expected to grow with a CAGR of about 12% till 2026”
The cost of carrying out clinical trials in India is nearly 40-70% less when compared to other counterparts in Europe or the U.S. This along with skill sets and ease of doing business, is fueling the market growth of Indian CROs.
In addition to this, the Indian CROs offer:
Extensive scientific competence to service a global clientele ensuring high customer centricity and satisfaction
Successful track record of stringent compliance culture
Technology driven CRO solutions and enhance operating efficiencies and compliance management
Skilled personnel and experienced professional management with focus on continuous professional development
Pharmaceutical R&D spend on the rise
The Indian CRO market witnessed growth owing to increasing number of clinical trials amidst an increasing demand for effective and novel vaccines to curb the SARS-CoV2 virus. Many biotechnology and pharmaceutical companies are noted to have made long term agreements, collaborations, and partnerships with Indian CROs.
As per a recent market research report, the global pharmaceutical R&D spend was USD 195 billion in 2021 and is estimated to grow to about USD 233 billion by 2026 at a CAGR of 3.6%. The market research analysis also reflects that the R&D spend by top 20 and other large players form the largest segment of the pie (7%) by 2026; however, small and mid-sized pharmaceutical companies will drive the spending at a CAGR of 6.1%. This gives ample opportunities to Indian CROs to grab a major pie of global R&D outsourced work from big-sized companies as well as small and mid-sized pharmaceutical companies.
“For research outsourced to Indian CROs, the higher rate is observed in clinical trials & toxicology drug value chain”
For research outsourced to Indian CROs, the higher rate is observed in clinical trials and toxicology drug value chain. Due to the different technical difficulties at each stage (i.e. preclinical and clinical trials), the outsourcing rate varies at all stages with a low rate of outsourcing observed during early stages of research and development and a higher rate during the clinical trial phase due to more work on process standardization.
Trends in the CRO Services Market
Higher investment in CROs combined with rising adoption of key companies relying on the specialized CROs for clinical trials are amongst some of the trends observed in the Indian CRO market. Innovator and novel generic pharmaceutical companies have been consistently investing in developing new drugs thereby supporting large-scale drug discovery activities. A large number of novel new drug applications are filed by niche innovator companies who outsource the drug discovery and pre-clinical studies to CROs.
The Preclinical segmentis expected to witness lucrative growth on account of a rise in the demand for pharmacokinetic services to support toxicology tests for IND-enabling studies. The relevance of toxicology testing, bioanalysis and DMPK testing are crucial and important stages of the drug development process. Driven by increased outsourcing of preclinical research by small-to-mid segment pharmaceutical companies, Indian preclinical CROs are in commanding position to cash-on this exciting opportunity.
The global generic drug industryis witnessing rising number of losses of patent and exclusivity of innovator drugs, which in-turn is propelling the Bio-availability and Bio-equivalence (BA/BE) studies for Indian CROs. India is a preferred destinations for BA/ BE studies due to its current CRO infrastructure, emergence and growth of the biosimilars industry, increased demand for complex generics, availability of healthy volunteers to participate in the BA/ BE studies, cost-efficiency, changing regulatory landscape and evolving clinical trials evaluation standards in the country. The generic drug market value is projected to reach USD 517 billion in the next five years, expanding at a CAGR of 4.9%. There is a significant growth opportunity for standalone bioanalytical services which can be capitalized by Indian CROs through expansion and growth of bio-analytical capabilities. Indian CROs like Veeda Clinical Research is already working on strengthening its capacities in offering BA/BE studies, particularly in the areas of complex studies involving complex molecules and areas such as inhalation studies, glucose clamp and dermatology. Indian CROs have a definite chance of leveraging this growth opportunity in the generic drug industry.
Increasing focus on Biosimilars Industry: Indian CROs have made rapid strides in offering niche services to ever-growing biosimilar industry which has advantage of patent losses of key biologics. While the global market for biosimilars is estimated to grow at a CAGR of 17.3% with, a market size of ~ USD 79.2 billion in 2026 from a market of ~ USD 35.7 billion in 2021, the biosimilars market in India is estimated to grow at a CAGR of 34%, increasing from ~ 0.6 billion in 2021 to ~ USD 2.54 billion in 2026. While India has over 95 biosimilar molecules approved, the Ayushman Bharat Yojana, a universal health care coverage program of India, is permitting under-served population to access biosimilars. This initiative has further opened a large industry for biosimilars within India.