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 identifying medicines that are going off patent, fil-
pharmaceutical industry in India ing the necessary abbreviated new drug
improve brand image, achieve applications (ANDA) and drug master files at the
operational excellence, efficiencies along appropriate time, securing the appropriate FDA
the value chain, and regulatory approvals and such others, including willingness
compliance.
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 dis-
covery, its manufacture, and distribution, the industry is perceived as
being reluctant to take the enabling technology route for achieving opera-
tional 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 commenda-
ble. 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 pa-
tent, 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 ex-

pand 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 in Singapore. The proposed India-Japan Com-
evaluate the benefits of Electronic Batch
prehensive Economic Partnership Agreement
Recording (EBR) solutions and
(CPEA) envisaging similar provisions will open
Manufacturing Executution Sysetms built
opportunities for Indian pharmaceutical firms to
around standards such as ISA 88 and S95.
enter into the world’s second largest pharma-
ceutical market.

Despite the size of the pharmaceutical industry and its rapid growth and
the important role that manufacturing IT solutions play during drug dis-
covery, its manufacture, and distribution, the industry is perceived as
being reluctant to take the enabling technology route for achieving opera-
tional 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 pro-
viders 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 elec-
tronic 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 in-
dustry 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 manufac-
turing practices, and brand image must begin
Drug manufacturers must leevarge to evaluate the benefits of investing in enabl-
technology solutions, such as MES,LIMS,
ing technologies. ARC believes that as India’s
PLM, PAT, APC and integrated enterprise
pharmaceutical industry scales up it will be-
operations to make their entire value chain
statutory compliant, efficient, and
come mandatory for drug manufacturers to
productive. 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 effi-
ciency 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 genera-
tion, 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 in-
formation 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 mini-
mizes any error or deviation, and thereby leads to consistent product
quality.

Manufacturing Execution System (MES) can help the plant to track activi-
ties 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 opti-
mization, 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 pharma-
ceutical 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 Indus-
tries” 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-Forum-
2010/Pages/Process-Batch.aspx or contact varshag@arcweb.com or praka-
sha@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