Outsourcing Pharma R&D to India and China
After conquering the BPO and IT outsourcing realms, India and China are fast moving into the field of international pharmaceuticals. With costs uncontrollably shooting up, product shelf lives getting shorter getting shorter by the minute, and rules and regulations bearing down on an industry struggling to keep afloat, it comes as to surprise that pharmaceutical companies have turned their attention to India and China to carry out their research and development (R&D) processes.
Most obvious of the considerations for this shift is the cost, alongside time and risk-management for R&D. Countries with educated work forces and lower-cost operations present a more cost-effective and feasible solution to going against the globalization tide. Among the promising options are forming alliances with local companies, working out contractual outsourcing arrangements, and establishing local subsidiaries.
A Frost & Sullivan analyst, Himanshu Parmar points out, “Contract research organisations (CROs) are a popular option and carry out medical and scientific studies on a contractual basis for multiple clients,” and goes on to point out, “They provide part, or all of the processes of clinical research including clinical trial management, data management, statistical analysis, protocol design and final report development.”
Outsourced R&D activities to India and China make up 20% to 30% of total global clinical trials. These provide competitive advantages in the form of access to well-developed and specialized skills, as well as a continuous stream of work hours from both countries.
However, even with promising returns on investments in the two countries, international pharmaceuticals have been holding back in investing in outsourcing operations to foreign shores. Concerns revolve mostly around quality and infrastructure, alongside jitters over control of process and proprietary knowledge.
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