Outsourcing in pharma seen growing

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Mumbai, Nov 2: Pharma outsourcing to India has the potential to pick up due to several distinct factors. In US, the time to get the drug to market has increased from 7.5 years in 1970s to 12.5 years in 1990s. This is less by as much as 30-40% if done in India. Moreover, administrative costs incurred by pharma companies in India are 30-50% lower than those in the West.

AT Kearney Inc vice-president & managing director, Andrea Bierce attributes the attractiveness of India as an outsourcing destination to various aspects. “India has a huge pool of talented doctors. 20,000 new doctors graduate every year in India. There is also a distinct wage arbitrage in India. The regulatory requirements in this country are not as strict as those in US.” said Ms Bierce. Lower R&D costs is another major advantage.

However, the regulatory issue is considered to be a little controversial. Pharma companies may find India attractive for activities like clinical trials because of the presence of many diseases. But the industry and the government need to work in tandem to balance the interests of the people and the outsourcing opportunities available.

GSK has one of the largest presence in India among all foreign companies. They have a five year arrangement with Ranbaxy for drug discovery and have a clinical research centre. The company has five manufacturing plants and is also into bio-informatics and DNA sequencing.

It is learnt that Astra Zeneca, which has a very focussed strategy on drug discovery on tuberculosis (TB), is likely to begin clinical trials on TB in India by 2006. Conversely, Indian biotech major, Biocon, which has a diabetics focus, is expected to get into a joint venture/partnership in the US in future.