Spontaneous Thoughts on an Article About Indian CRO Business

Reading the C&EN article titled “India Seeks a Seat at the Drug Services Table” reminds me of my experience at the BIO International Convention 2024 held in San Diego this June. South Korea proudly showcased several world-class biopharmaceutical CDMO companies, including Celltrion and Samsung Biologics. Their large booths and active participation at the BIO event left a strong impression on me. Symbolically, Wuxi Biologics, one of the largest Chinese CRO firms, did not participate in the BIO event (source), reflecting rising tensions between the U.S. and China. Many Korean companies at the event seemed eager to capitalize on this situation.

Unlike biologics, it’s rare to see Korean companies making aggressive moves in the small molecule field. Many Indian companies mentioned in the article excel in API production for small molecules and offer integrated drug discovery services by adding biological capabilities.

The issues faced by Indian companies mentioned in the article are as follows:

1. Dependence on China: India imports most of the raw materials needed to make APIs (Active Pharmaceutical Ingredients) from China, relying on imports for over 50% of its APIs.

2. Infrastructure Deficiency: India’s infrastructure—roads, railways, ports, and energy—is inferior compared to China.

3. Bureaucracy and Work Ethic Perception: Some people perceive Indian companies as inefficient due to lower quality or bureaucratic problems.

4. Lack of Specialized Skills: Custom drug services require expertise in developing patented molecules. Many new companies may lack these specialized skills or the ability to sustain continuous project inflow.

5. Lack of Self-Sufficient Supply Chains: Despite incentives from the Narendra Modi government, many Indian CDMOs still haven’t built self-sufficient supply chains.

I have experience working with both Chinese and Indian CRO firms on small molecule synthesis projects. It’s challenging to make blanket comparisons between Chinese and Indian companies due to varying experiences depending on the company, team, and specific project.

An interesting point is my discussions with many European CRO firms. Unable to compete with Chinese or Indian companies on price, they emphasized specialized skills. The ultimate goal in the pharmaceutical industry is to create unique IP, which requires experienced and skilled scientists who can produce results that many newcomers cannot. While it’s not fair to generalize that Chinese or Indian scientists are less capable, borrowing the expertise of seasoned scientists from major pharmaceutical firms offers an invaluable advantage that can’t be measured by price alone.

Many Koreans proudly recount how Samsung and LG triumphed over former giants as TVs transitioned from CRTs to LCDs. This is an example of how quickly moving smartly in emerging fields can lead to leadership positions. Celltrion and Samsung Biologics, achieving outstanding success in the biosimilar field, can be seen as another example.

In contrast, small molecule-based drug discovery is a much older and well-established field, making it harder for latecomers to catch up with leaders. Considering the aforementioned issues faced by Indian companies in this field, it’s doubtful whether intensive investments can overcome these challenges quickly.

Of course, no field stays fixed forever. There are always players who achieve significant results despite adverse conditions, and many companies are striving for such unexpected turnarounds. These stories of reversal give hope to many who are working hard, similar to the story of David defeating Goliath.