LONDON—There is a merger and acquisition (M&A) opportunity for large contract manufacturing organizations (CMOs) in North America and Europe to acquire facilities able to produce medicines with lower operating expenses than in their own territories, says data and analytics company GlobalData—and that opportunity lies in Southeast Asia.

“Only 3 percent of CMO Indian facilities that sell solid dose drugs to North America, Europe and Japan are foreign-owned, and the majority of commercial solid dose facilities in India are owned by India-headquartered companies,” said Adam Bradbury, a PharmSource analyst at GlobalData. “Only six U.S., five U.K., and three German CMOs own solid dose manufacturing sites in India.

“While the Indian pharma industry is best known for its small-molecule active pharmaceutical ingredient (API) production—offered by almost half of the country’s contract manufacturing facilities—India also has a strong commercial dose and analytical services industry, often in the same facilities that manufacture APIs.”

Approximately 38 percent of Indian solid dose facilities have the regulatory approvals to supply the United States, Canada, the European Union and Japan.

Concluded Bradbury: “India’s presence among the top five countries shows the location’s appeal for contract manufacturers to supply developed markets; however, the facility count does not include all pharma facilities because many Indian CMOs only supply locally and do not have approvals to supply to the U.S., Europe or Japan, and many CMOs are headquartered in developed markets’ own local facilities.”