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eye on excipients Tablets & Capsules March 2018 43 This edition of the column discusses current trends in the Indian pharmaceutical excipient market, detailing factors that make India a favorable alternative excipient source for large pharmaceutical companies. It also analyzes excipients currently being exported to the US and Europe and the leading Indian excipient exporters. Large pharmaceutical companies currently source less than 10 percent of the excipients they use from India and prefer to engage with suppliers located in developed pharmaceutical m a r k e t s . H o w e v e r , t h e I n d i a n excipients market is growing at 10 to 12 percent annually compared to the global annual growth rate of 5 to 7 percent. Companies are beginning to consider India to be an attractive alternative excipient source—at least for commodity or non-functional excipients. Developed versus emerging markets The growth potential in the Indian excipient market is largely due to the availability of low-cost raw materials and labor and the ability of suppliers to quickly adapt to new technology [1]. Indian excipient suppliers have the advantage of offering conventional excipients at a lower price than suppliers from developed markets, yet India contributes only 5 to 7 percent of the global excipient supply. Currently, suppliers from the US, Europe, and Japan dominate the market, contributing a combined 85 percent of the global excipient supply. In 2013, while consumption of solid oral dosage form (SODF) excipients by volume was the same in the US, Europe, China, and India— approximately 100 kilotons per region [2]—excipient consumption by value was different for each region—39 percent in the US, 34 percent in Europe, 14 percent in China, and 13 percent in India. This is because, in the developed markets of the US and Europe, consumption includes more expensive, functional excipients, while, in the emerging markets of China and India, consumption is limited primarily to less expensive, traditional excipients [3]. Demand for functional excipients is expected to grow at a compound annual rate of 8 to 10 percent for the period from 2016 to 2020, compared to 3 to 4 percent for traditional excipients. Because of this relatively high demand for functional excipients, the US and Europe will lead in this segment [4, 5]. Major pharmaceutical companies typically engage with one or two qualified excipient suppliers. For most excipients, these companies prefer to work with top suppliers from the developed market because the suppliers not only provide high- quality excipients but also offer their large clients customized technical services based on their specific formulation needs. Table 1 shows five common SODF excipients along with the top two suppliers of each. Large, multinational pharmaceutical companies prefer excipient suppliers such as Ashland, BASF, Colorcon, and Lubrizol because they can provide newer functional excipients that can be used in applications that lower m a n u f a c t u r i n g c o s t s , s u c h a s controlled-release modifications and hot melt extrusion. These large pharmaceutical companies primarily use Indian and Chinese excipient suppliers to leverage price against their current, developed-market suppliers, keeping them competitive. Companies rarely switch suppliers unless there's a compelling reason, such as meeting local demand from a regional source, because the cost of switching and the supply-chain risks associated with a cheaper source dramatically outweigh the savings. Kirti Vatsa Beroe Table 1 Top suppliers for common excipients Excipient Suppliers Microcrystalline cellulose (MCC) FMC, JRS Pharma Hydroxypropyl methylcellulose (HPMC) Ashland, Dow Hydroxypropyl cellulose (HPC) Ashland, Nisso Empty hard gelatin capsules Capsugel, Qualicap Gelatin Rousselot, Gelita AG