| As the number of pharmaceutical offshoring deals continues to swell, Martyn Hart of the NOA assesses the ever-increasing benefits of outsourcing to India
The last few years have seen pharmaceutical companies facing increased pressures on profit margins, absence of blockbuster molecules, spiralling R&D costs, pricing pressures and higher overheads. This has led to a spate of outsourcing deals within the sector. The prominent service providers in India offer a gamut of services in drug discovery, clinical trials, drug development activities, manufacturing and formulations, preclinical trials, bio-informatics and lab services. It is the clinical trials that appear to be the biggest business; the Indian market is estimated at $100 million and is expected to reach $300 million by 2010, according to CenterWatch.
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India has long been the nation of choice for British and American organisations offshoring IT service provision. India benefited from the growing demand for IT support in the run up to the millennium. Many companies realised that India had the skills and personnel bandwidth to be able to cope with large global projects. These are clearly transferable skills, with companies outside of the IT sector tapping into the Indian market. The wide-ranging nature of the Indian skills-set means that in the last few years, pharmaceutical companies have taken advantage of outsourcing to India.
According to a recent Citigroup report, Indian pharmaceuticals: searching for relief as headaches persist, around $15-20 billion worth of manufacturing activity and $3- 4 billion worth of research (informatics, chemistry services and chemical custom synthesis) is being outsourced on a global basis. Last year, Indian companies managed to bag manufacturing contracts worth almost $75 billion. |
