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ARC VIEW

MAY 24, 2010

India’s Pharmaceutical Industry is Perceived as Lagging behind in Adopting Manufacturing IT Solutions
By Rajabahadur V Arcot and Piyush Dewangan

Summary
The performance of India’s pharmaceutical industry has been impressive. It has emerged as a producer of quality drugs complying with the global standards. It has learnt the nuances of the generic drug market dynamics –
Manufacturing IT solutions will help pharmaceutical industry in India improve brand image, achieve operational excellence, efficiencies along the value chain, and regulatory compliance.

identifying medicines that are going off patent, filing the necessary abbreviated new drug applications (ANDA) and drug master files at the appropriate time, securing the appropriate FDA approvals and such others, including willingness to overcome legal tangles. The industry has grown

both organically and inorganically though global acquisitions and mergers. Despite the size of the pharmaceutical industry and its rapid growth and the important role that manufacturing IT solutions play during drug discovery, its manufacture, and distribution, the industry is perceived as being reluctant to take the enabling technology route for achieving operational excellence, efficiencies along the value chain, ensuring quality and compliance, and such others. ARC believes that this status must change for the industry to live up to its full potential.

India’s Pharmaceutical Industry will Gain by Adopting Manufacturing IT Solutions
The performance of India’s pharmaceutical industry has been commendable. While the performance of the country’s information technology companies gets all the attention, the pharmaceutical industry’s contribution is equally impressive. It is a $20 billion industry with almost 60 percent of its revenues coming from exports. The industry has grown by targeting the opportunities in the generic market and leveraging its strengths in drug formulation technology. It has emerged as a producer of quality drugs complying with the global standards. It has learnt the nuances of the ge-

VISION, EXPERIENCE, ANSWERS FOR INDUSTRY

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neric drug market dynamics – identifying medicines that are going off patent, filing the necessary abbreviated new drug applications (ANDA) and drug master files at the appropriate time, securing the appropriate FDA approvals and such others, including willingness to overcome legal tangles. The industry has grown both organically and inorganically though global acquisitions and mergers. Although India’s pharmaceutical industry has taken tentative steps to expand through the drug discovery path, its forte will continue to remain generic medicines. It is constantly on the lookout for further strengthening its position. The recent agreement at the state level between Singapore and India provides access to the Singapore market for any Indian generic drug, which has got regulatory approvals in the US, Britain, EU, Canada and Australia without having to seek fresh approvals
Domestic pharmaceutical companies must evaluate the benefits of Electronic Batch Recording (EBR) solutions and Manufacturing Executution Sysetms built around standards such as ISA 88 and S95.

in Singapore. The proposed India-Japan Comprehensive Economic Partnership Agreement (CPEA) envisaging similar provisions will open opportunities for Indian pharmaceutical firms to enter into the world’s second largest pharmaceutical market.

Despite the size of the pharmaceutical industry and its rapid growth and the important role that manufacturing IT solutions play during drug discovery, its manufacture, and distribution, the industry is perceived as being reluctant to take the enabling technology route for achieving operational excellence, efficiencies along the value chain, ensuring quality and compliance, and such others.
Pharmaceutical Industry Lags Behind in Enabling Technology Adoption

ARC’s discussions with various automation and enterprise solution providers reveal that pharmaceutical companies in India are not effectively leveraging enabling technologies. Many among them believe that domestic pharmaceutical companies lag behind their global peers in leveraging electronic batch recording (EBR) solutions built around standards, such as ISA 88 and S95. Various factors, such as implementation challenges, justifying the return on investments, “why rock the boat when sailing is smooth?”, and such others are contributing to this situation.

©2010 ARC • 3 Allied Drive • Dedham, MA 02026 USA • 781-471-1000 • ARCweb.com

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ARC is planning to publish a strategy report aimed at creating necessary awareness among the pharmaceutical industry, invite industry thought leaders to network and discuss the challenges and imperatives for the industry to adopt enabling technologies, and carry out a survey to gain insight into current status. Automation systems and enterprise solutions will help pharmaceutical companies achieve operational excellence, real-time traceability, statutory compliance and such others. Investments in these systems and solutions will result in saving effort and money.
Automation Systems and Enterprise Solutions Help Pharmaceutical Companies Achieving Operational Excellence in the Entire Value Chain

The industry, which has done well in developing skilled human resources, establishing systems to meet the industry requirements for good manufacturing practices, and brand image must begin
Drug manufacturers must leevarge technology solutions, such as MES,LIMS, PLM, PAT, APC and integrated enterprise operations to make their entire value chain statutory compliant, efficient, and productive.

to evaluate the benefits of investing in enabling technologies. ARC believes that as India’s pharmaceutical industry scales up it will become mandatory for drug manufacturers to rely more on technology solutions, such as manufacturing execution systems, laboratory

information management systems, product lifecycle management, process analytical technology, advance process control, and integrated enterprise operations to make their entire value chain statutory compliant, efficient, and productive. It becomes all the more important as industry transits from a predominantly high margin proprietary pharmaceutical market to coexist with generic and generic branded market where manufacturing efficiency and responsiveness play a critical role. Electronic Batch Record system (EBR) is an efficient way to capture data, exchange batch information, batch production management, maintain data security and integrity and report production. EBR increases productivity and accuracy of operators. With features such as security, audit log generation, and e-Signature capture, EBR ensures compliance with the 21 CFR Part 11 regulations. Implementation of LIMS helps to improve the data management system through structured and systematic storage of data associated with laborato-

©2010 ARC • 3 Allied Drive • Dedham, MA 02026 USA • 781-471-1000 • ARCweb.com

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ry work processes and administrative functions, such as tracking employee training and laboratory resources, generating backlog reports, billing information and workload statistics and insights into laboratory costs. Process Analytical Technology (PAT) helps the industry in both the lab and plant to understand, design and control the processes in a way that minimizes any error or deviation, and thereby leads to consistent product quality. Manufacturing Execution System (MES) can help the plant to track activities and resources, link administration to the shop-floor activities, and are very useful in plant scheduling activities. It can be integrated with supply chain, inventory control, maintenance and other such applications. Management of firms’ supply chain with key aspect of SCM, such as optimization, collaboration and analytic solutions ensures a company’s ability to forecast demand, take an order, give an accurate delivery date, source and manufacture the right goods, position inventory properly, pick, pack and ship efficiently, and thus manage the complex functioning of pharmaceutical companies.
Last Word

ARC plans to conduct a survey to understand the pharmaceutical industry issues and challenges and chart a roadmap about investing in enterprise solutions and automation solutions. On the anvil is our forum “Driving Innovation, Sustainability, and Performance for Process and Batch Industries” in Hyderabad on July 16-17, 2010 that will discuss a roadmap for the pharmaceutical, food, and beverage industries to emerge world class. We plan to write a strategy report aimed at creating necessary awareness among pharmaceutical industry with case studies and a roadmap for it to adopt enabling technologies. For details about ARC forum, please visit http://www.arcweb.com/Events/ARC-India-Hyderabad-Forum2010/Pages/Process-Batch.aspx or contact varshag@arcweb.com or prakasha@arcweb.com or call 080 – 25547116 080 – 25547116. For further information or to provide feedback on this Insight, please contact your account manager or the author at raja@arcweb.com . ARC Insights are published and copyrighted by ARC Advisory Group. The information is proprietary to ARC and no part of it may be reproduced without prior permission from ARC.

©2010 ARC • 3 Allied Drive • Dedham, MA 02026 USA • 781-471-1000 • ARCweb.com