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The US Biosecure Act will present a significant opportunity for Indian contract development and manufacturing organisations (CDMOs) to expand their market share, enhance capabilities, and contribute to the global pharmaceutical supply chain. However, the Act's final form and implementation will determine the exact impact on the Indian CDMOs.
Biosecure Act with 306 to 81 votes was passed by the US Senate House to make pharma companies stop doing business with some Chinese biotech companies. Biosecure Act is positive for the CDMO companies as it prohibits the US government from contracting with, or providing grants to, companies that do business with a ‘biotechnology company of concern’. It specifically names five Chinese companies: BGI, MGI Tech, Complete Genomics, WuXi AppTec, and Wuxi Biologics.
This would further boost the demand outlook for non-Chinese companies. Particularly, it would be positive for Indian CDMOs like Divis Labs, Syngene, Piramal Pharma, Suven and Laurus.
According to Dr Mahesh Bhalgat, Group CEO and managing director, Veeda Clinical Research, the Biosecure Act is a potential game-changer for the Indian CDMO space, but it demands significant investment in infrastructure and talent to handle the influx of projects.
Quoting Mordor Intelligence report, Dr Bhalgat said the contract manufacturing sector is estimated at $22.52 billion in 2024, and is expected to reach $44.63 billion in 2029, growing at CAGR of 14.67%. Department of Pharmaceuticals reports, Indian CRO segment has been growing at CAGR of 10.75% and will reach $2.5 billion by 2030.
In the process of getting the Act approved and sign into law will lead to a shift in the global CDMO landscape, with increased demand for Indian contracts. The 5-year trajectory will further accelerate growth and the additional drivers in the CDMO segment suggest the openness of manufacturing cost advantages, foreign direct investments, and government incentives such as the production-linked incentive (PLI) plan among others. India’s CDMO segment is already well-developed, but this move will act as a catalyst and speed up growth, Dr Bhalgat told Pharmabiz.
Indian players do need to recognize that while US players move business outside China they do get stiff competition from local US CDMOs and CROs as well as those from other part of Asia such as Singapore and Korea, he noted.
On the CRO side of opportunity: The recipe for winning this work from China, Indian players need to use this opportunity to further increase speed and efficiency of delivery for drug discovery projects. Veeda is taking an approach of ensuring capacity availability to support its clients with safety assessment and toxicology studies. For early stage biopharma programmes, Veeda is working on technologies to reduce time required for analytical characterization packages for biomolecules. Mid-sized companies like Veeda are particularly attractive because of the flexibility in scheduling projects that they can offer to clients, while maintaining the highest quality standards and scientific and technical oversight, said Dr Bhalgat.
The grandfathering clause in the Biosecure Act, which allows existing contracts with China to continue until 2032, provides some preparations time but delays immediate financial gains for Indian companies, he noted.
Nevertheless, the Indian companies have their own advantages of being cost-effective and with skilled workforce. Plus the Indian government has been offering grants and loans to boost the sector, said Dr Bhalgat.
“Our government should support the stakeholders in advancing their expertise. All manufacturers can explore this as a growth area. Existing CDMOs can further strengthen their inroads into the US,” said Kaushik Desai, a pharma consultant.
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