As part of their efforts to reduce the cost of developing new drugs, multinational pharmaceutical companies are eyeing R&D outsourcing opportunities in countries like India and China. The R&D for drug development can be done in India as low as 30-70% of the cost as compared to western countries, where the cost for developing a new drug is estimated at $800 million-$1 billion.
Sandeep Gupta, chairman and managing director, Eli Lilly and Company (India), told FE, We are still examining the performance of the deals we have already signed and as of now, we are satisfied with the results. We are keen to use India as our outsourcing hub owing to its cost advantage as well as the availability of quality R&D services. We are also exploring the possibilities of entering into more outsourcing deals. However, since the final decision on the matter is being taken by our parent company, I cannot comment on anything specific.
During January this year, the $15-billion Lilly signed a drug discovery deal with Mumbai-based Nicholas Piramal to develop and commercialise a select group of its pre-clinical drug candidates of multiple therapeutic areas. Under the deal, Lilly would make milestone payments of up to $100 million and royalties on sales upon successful launch of the drugs.
In August 2006, Lilly signed a deal with Hyderabad-based Suven Life Sciences to collaborate on the pre-clinical research of molecules in the therapeutic area of central nervous system disorders.