Cost-effective R&D outsourcing attracts Global Pharmaceutical industry to India and China

Posted AtNet India News

The rise of India and China as global economies presents immense opportunities for the international pharmaceutical industry. Besieged by ever-increasing cost pressures, shorter product life cycles and numerous regulatory challenges in the West, the industry is increasingly shifting its research and development (R&D) base to the two developing nations.

This is done to minimise the expenses, time and risk involved in R&D. During the 90s, the cost of bringing one new molecule to the market was as high as $800.0 million in developed nations. The European Federation of Pharmaceutical Industries and Associations (EFPIA) estimates that on an average out of 10,000 molecules developed in laboratories, only one or two will successfully pass all stages of drug development and be commercialised.

If you are interested in an analysis, which provides manufacturers, end users, and other industry participants with an overview, summary, advantages and disadvantages of pharmaceutical R&D outsourcing to India and China ? please send an e-mail to Surbhi Dedhia and Samantha Unnikrishnan- Corporate Communications at sdedhia@frost.com/ sunnikrishnan@frost.com with the following information: Full name, Company Name, Title, Contact Tel Number, Contact Fax Number, E-mail. Upon receipt of the above information, an overview will be e-mailed to you.

Pharmaceutical companies looking for lucrative solutions, thus, prefer low-cost, developing countries to expensive R&D in the West. Alliances with local companies, contractual outsourcing arrangements and establishing local subsidiaries are good options for enterprises thinking of utilising the strong intellectual potential in India and China.

"Contract research organisations (CROs) are a popular option and carry out, on behalf of multiple clients, medical and scientific studies on a contractual basis," says Frost & Sullivan Research Analyst Himanshu Parmar (http://pharmaceuticals.frost.com). "They provide part of or all of the processes of clinical research including clinical trial management, data management, statistical analysis, protocol design and final report development."

These outsourcing activities in India and China amount to 20.0 to 30.0 per cent of total global clinical trials. The competitive advantage here lies in the access to specialised skills in excellent research institutes in both countries on a 24/7 basis. In addition, better management from the start reduces development risks.

Despite these benefits, there has been a relatively low level of utilisation of the opportunities in both countries due to various concerns with respect to quality and infrastructure. Companies are worried about probable loss of control in processes and proprietary knowledge. Proper management is needed to utilise complicated and long-distance collaborative third-party relationships. Delays can even happen due to regulatory hold-ups.

This has motivated domestic companies and government in individual countries, keen to increase foreign participation and to figure prominently on the global map, to implement necessary changes to improve clinical research facilities.

"Government commitment in India and China to improve access to high-quality healthcare is a bonus for R&D outsourcing," opines Parmar. "The regulatory environment in both countries is gradually changing in favour of clinical research."

Recent amendments to Schedule Y of Drugs and Cosmetics Rules of India, 1945, signify progressive attitude on the part of the Indian Government, clarifying the environment for clinical research in the country. In China, regular monitoring of clinical trials ensures good clinical practice (GCP)-compliant research centres established by the government. These steps will assist the two countries attain international standards in pharmaceutical research.

For those companies wishing to utilise the regulatory changes and high-quality research, considering alliance strategy and identifying the region of opportunities should be priorities. Embracing the changes through innovative strategies and flexibility alone will allow international pharmaceutical enterprises to capitalise on these new attractive propositions. Looking ahead to the increasing trend towards partnerships and alliances in the pharmaceutical industry, Frost & Sullivan is organizing a premium event, "Global PharmAlliance 2005 ? Becoming the partner of choice" being held at Mumbai (India) on September 30th and 1st October, 2005.For more information visit: www.frost.com/pharmalliance

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics and demographics. For more information, visit http://www.frost.com.

September 01, 2005