India CRO Market Trends

INCREASING R&D EXPENDITURE The Contract Research Organization (CRO) market in India has witnessed significant growth in recent years, primarily driven by the substantial increase in research and development (R&D) expenditure within the country. One of the key factors contributing to this growth is the Indian government's commitment to bolstering the country's R&D infrastructure. Various initiatives and policies have been introduced by government (such as incentives, tax benefits, and regulatory support) to promote innovation and scientific research which has made India an attractive destination for pharmaceutical and biotech companies looking to outsource their R&D activities. For instance, Section 35(2AA) of the Income Tax Act provides weighted deductions for companies engaged in scientific research. This incentive encourages pharmaceutical companies to invest in research and innovation. Furthermore, in 2017, India government had launched National Biopharma Mission to accelerate the early development of biopharmaceuticals, vaccines, and diagnostics. It includes initiatives to support biotechnology startups and encourage innovation. Furthermore, India's favorable regulatory landscape, large and diverse patient population, and availability of world-class research facilities make it a magnet for clinical trials and other research endeavors. In addition, rise in government spending on research and development (R&D) activities for drug development further drives the growth of the India Contract Research Organization (CRO) market. For instance, According to Department of Science and technology, India’s per capita R&D expenditure has increased to current Public-private partnerships for innovation (PPP)$ 42.0 in 2020–21 from current Public-private partnerships for innovation (PPP) $ 29.2 in 2007–08. Furthermore, according to same source, India has spent 0.7% of GDP on research and development activities. Thus, rise in government spending on research and development (R&D) activities for drug development further drives the growth of the India Contract Research Organization (CRO) market. RISING NUMBER OF CLINICAL TRIALS The India CRO market has experienced remarkable growth, largely propelled by the surge in the number of clinical trials conducted in the country. For instance, in 2023, Sun Pharmaceutical Industries Limited had announced positive results of Nidlegy™ drug from the Phase III PIVOTAL trial for the patients suffering from locally advanced fully resectable melanoma. In addition, according to drug control organization (India's largest clinical trial firm) India has emerged as a key destination for clinical trials in the aftermath of the pandemic, with numbers increasing tenfold in the last three years. Thus, increase in clinical trial activity for drug development is a significant driver for the Indian CRO market, reflecting India's growing importance as an India hub for pharmaceutical and biotechnology research and development. Moreover, one of the primary catalysts for this surge is the cost-effectiveness of clinical trials in India, which offers substantial savings to pharmaceutical and biotech companies compared to trials conducted in more developed economies. Additionally, India's well-established infrastructure for clinical trials, including state-of-the-art research facilities and a robust regulatory framework, has further cemented its status as a preferred location for conducting a wide range of clinical trials. As the demand for innovative drugs and therapies continues to grow, the Indian CRO market is well-positioned to play an integral role in the advancement of medical research and pharmaceutical development on an India scale, making it a pivotal player in the ever-evolving landscape of healthcare and life sciences. For instance, according to clinical trials arena in 2021, about 40.6% industry sponsored clinical trials held in India and non-industry sponsored trials accounted for a 59.4% share in 2021 as against the average of 62.8% in the last ten years. GROWING CRO OUTSOURCING IN DRUG DEVELOPMENT The India CRO market has emerged as a dynamic and influential player in the India pharmaceutical and biotechnology industries. Several drivers fuel the rapid growth of CRO outsourcing in drug development in India, transforming it into a powerhouse of research and development activities. One of the primary drivers is the significant cost advantage offered by Indian CROs, which can offer high-quality services at a fraction of the cost compared to their Western counterparts, making it an attractive option for companies looking to optimize their R&D budgets. For instance, Syngene (India) signed a 5-year agreement in August 2021 with the drug discovery and development subsidiary of Deerfield Management (US). Additionally, in 2022, Aurigene has collaborated with EQRx company for drug discovery, pre-clinical and clinical development and commercialization. In this Collaboration, Aurigene will lead drug discovery and pre-clinical development efforts, and EQRx will assume responsibility for clinical development, manufacturing, regulatory and commercialization efforts. The parties would share both funding for the discovery and development of the programs and financial results resulting from the commercialization of any eventual drug candidates. Furthermore, India's diverse patient population along with high genetic & rare disease prevalence rates increasing clinical trials development, especially for diseases endemic to the region. This diversity allows for more comprehensive and diverse data collection, critical for the success of drug development projects. The Indian government's supportive policies and initiatives to promote the pharmaceutical and biotechnology sectors, including the 'Make in India' campaign, have also encouraged the growth of CRO services, fostering a business-friendly environment. Moreover, the COVID-19 pandemic accelerated the adoption of digital technologies and telemedicine, providing an impetus for Indian CROs to offer innovative solutions and leverage cutting-edge technologies for drug discovery and clinical research. As a result of these multifaceted drivers, India's CRO market has experienced remarkable growth, establishing itself as a pivotal player in the India drug development landscape, with a promising future ahead.