Will India become a Potential Sourcing Hub for Excipients?

Abstract 

1. Introduction 
     Currently, big pharmaceutical companies are sourcing very low amounts of excipients (<5–10 percent) from India and are opting to engage with suppliers located in the developed market. In India, there has been an increase in the percentage of drug master files (DMFs) for excipients (7 percent in 2011 to 13 percent in 2017) as well as an increase in exports of few excipients to developed market. The excipient market in India has lucrative growth opportunity due to the availaibilty of low-cost raw materials, labor costs, and quick adaptability of suppliers to new technology. The Indian excipient market is growing at 10–12 percent as against the global growth rate of 5–7 percent. The global excipient manufacturers are also shifting towards India via different entry strategies—joint venture, new manufacturing facility, and acquisition of domestic suppliers. Hence, based on these trends, India would soon be considered an alternative sourcing destination by MNCs at least for commodity/non-functional excipients. However, factors such as quality risk and high supplier switching cost would decide if pharmaceutical companies can leverage this changing trend. 
    
2. Main Focus 
     This whitepaper has focused on favorable factors that can make India an alternative sourcing destination for big pharmaceutical companies; the whitepaper has also discussed current market trends in the Indian pharmaceutical excipient market. It has also analyzed excipients that are currently being exported to the U.S. and Europe and focused on the leading suppliers (with the U.S.-DMF and good manufacturing practices (GMP)) that are currently active in the Indian pharmaceutical excipients market. 
    
3. Growth Prospects 
     It is expected that the big pharmaceutical companies will consider India as the potential sourcing destination for excipients in the near future (5–10 years). With an increase in the number of suppliers with DMFs and an increase in exports to the developed market, it is expected that excipients, such as cellulose (mainly microcrystalline cellulose (MCC) and croscarmellose sodium), gelatin, coatings, and phosphate-based excipients, would be exported in larger quantities and at a lower price.