Ajanta may be API supplier again

The company sold its bulk drug manufacturing facility to fellow Indian company Orchid Chemicals in 1999 on the grounds that the sector had lacklustre prospects. However, it now says that a recovery in the outsourcing sector, and India's emergence as a major supplier of APIs, has prompted a re-think, according to a PharmaBiz report.

Ajanta is apparently not alone in this stance, as a number of Indian pharmaceuticals specialising in formulated medicines are now looking to the bulk drug business as a means of propping up their revenues.

One factor has been the growth of the global market for generic drugs; this is already valued at $42 billion (€35bn), but given that that drugs with sales of $55-$65 billion will go off-patent in the US alone in the next five years, its future growth seems assured.

And last year, pharmaceutical companies from India submitted a third of all the Drug Master Files for APIs received in the US, outstripping their international rivals by a wide margin, suggesting Indian companies will play a big part in supplying the demand for bulk drugs.

Moreover, from next year, the World Trade Organisation's intellectual property requirements come into effect in India, stifling the current thriving market for generic versions of in-patent drugs. This has already prompted a number of the larger players to invest in R&D of novel medicines, but bulk drug production could be a way to fund research in the near-term while firms wait for their pipelines to generate new premium products.