India, China emerge as world's preferred outsourcing partners in R&D

Posted AtPharmaBiz

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 R&D base to these two developing nations. This is being done primarily to minimise the expenses, time and risk involved in R&D.

Pharmaceutical companies looking for effective solutions prefer to outsource from low-cost developing countries like India and China rather than persisting with expensive R&D efforts in the west, while taking advantage of the intellectual pool in Asia, according to Sunil Srivastava, president, Richmond Chemical Corporation, US.

The two countries are keen to increase foreign participation and to figure prominently on the global map and to implement necessary changes to improve clinical research facilities. The regulatory environment in both countries is gradually changing in favour of clinical research.

The bulk drug business in India is estimated at about USD 1 billion with more than 400 APIs manufactured in India, making the country one of the top five bulk drug manufacturers of the world.

“With more than 60 US FDA approved units and the US Pharmacopoeia Commission’s laboratory being set up in India, the country is drawing a lot of attention,” Srivastava added.

Indian companies are now trying to make their mark on a global scale by licensing product abroad, acquisitions of foreign companies, R & D alliances with foreign multinationals and becoming increasingly FDA compliant. The major generic pharmaceutical players together accounted for exports of formulated products and APIs in 2004 of about US $ 1.1 billion. The leading contract manufacturers account for total exports of bulk drug substances of about US $ 80 million in 2004.

According to IMS Health, the Chinese pharmaceutical market is among the top ten in the world, estimated to be worth USD 10 billion. China has been traditionally a hospital-based pharmaceutical marketplace but the retail sector is growing rapidly and now accounts for about 25 per cent of the total market. The top 10 suppliers to this sector comprise five Chinese companies and five multinationals.

December 22, 2005