Emerging opportunities in CRAMS The Contract Research and Manufacturing Services (CRAMS) industry can be estimat ed to be churning revenues

of $850 million annually. It is worth noting the mome ntum gained by this segment of the Indian pharmaceutical industry. Over the last five years, CRAMS industry has been contributing close to eight percent to the total Indian pharmaceutical business. Factors like a vast expanse of specialty h ospitals with state-of-the-art facilities (nearly 7,00,000 hospital beds and 221 medical colleges); large English speaking population and rich talent pool; dive rse population and diverse gene pool; increasing number of chronic diseases and a combination of diseases characteristic of developing and the developed countri es is expected to propel the CRAMS industry to grow at a CAGR of over 25 percent from 2006 to 2011. CRAMS pertains to outsourcing services/ products from low-cost providers with wo rld class standards, in line with international regulatory norms like the USFDA, Australian-TGA, UKMCA, and EMEA. Pharmaceutical multinationals have traditional ly been outsourcing intermediates, API's and formulations. Since late 1990s, CRA MS has gained more importance, as MNCs have come under pressure to maintain thei r profitability. Over the last few years, the need to outsource has increased co nsiderably for big pharmaceutical companies, and outsourcing is gradually moving from being just a tactical or opportunistic option to a more strategic one to s ustain the demand from markets moving into the generic phase. Globally, drugs wo rth $70 billion would be going off-patent by 2011 and Indian companies providing contract manufacturing services are expected to garner approximately 30-40 perc ent of this opportunity. The pre-patent regime in India gave an impetus to the e xisting reverse engineering skills of Indian pharmaceutical companies. This was critical to supply drugs at low cost for captive domestic consumption, which led to adjacencies like superior chemistry, regulatory and manufacturing skills. Be nefits like availability of skilled labour at low cost (labour costs in India ar e around 1/7th the levels in developed countries), capital efficiency in setting up of world-class facilities in line with USFDA norms at a reduced cost of arou nd 25-50 percent due to access to locally fabricated equipment and high quality local technology/engineering are passed on directly to MNCs seeking to market dr ugs at lower cost. One set of players like Dishman, Divi's Labs, Shasun have practically no front-e nd presence in marketing finished products; their focus/mainstay has always been low cost manufacturing, intervening at a crucial point of the value-chain from where they have managed to evolve into providing high-end, complex manufacturing services. Such companies now boast of a robust portfolio of MNC clients like So lvay, AstraZeneca, Merck, GlaxoSmithKline and Eli Lilly. Second ls and lising e then nd the set of companies like Nicholas Piramal, Cadila Healthcare, Orchid Chemica Pharmaceuticals, too have gained a strong foothold in the CRAMS arena uti excess manufacturing capacities. Companies like those mentioned here, hav moved into providing drug discovery, custom chemical synthesis services a like.

There is another set of players like Veeda Clinical Research, iGATE Clinical Res earch International, SIRO Clinpharm, Neeman Medical International, HCL Systems, Cognizant Manipal Acunova, ClinInvent that provide services for Phase I-IV Trial s, IT support for intensive data management, high throughput screening at early discovery stages. Indian CONTRACT research service providers have established a strong foothold in the early and late clinical stages of contract research servi ces. However, domains such as pre-clinical and early discovery remain unexplored . These segments have untapped potential; services like bioinformatics, medicina l chemistry and regulatory filings can be offered, which form the ground for new drug discovery or contract research. This segment under CRAMS is dynamic and st ill evolving into a well established offering.