Drug Discovery Companies Turning to Asia

Companies from outside Asia are increasingly seeking to outsource drug discovery to India and China, according to a new report from Frost & Sullivan (Palo Alto, CA, USA), an international consulting firm. The drug discovery outsourcing market in India and China are forecast to reach $19.8 billion in 2011.

Other factors driving this shift are access to better expertise, better productivity, process improvements, variable costs, avoidance of capital outlays, and opportunities for companies to focus on specific niches. As competition in the global market escalates, multinational companies are aggressively seeking innovative strategies such as outsourcing production. The total global pharmaceutical manufacturing market reached almost U.S.$50 billion in 2004.

Now, the drug outsourcing market alone is evolving into a multi-billion dollar market in India and China by producing a continual pipeline of drugs that are approved faster than those in western countries. Both India and China are positioned to manage and deal with the pressures to enhance clients' profitability, to increase shareholder value, and utilize the potential of new drug discovery technologies.

The governments of these countries have worked to attract outsourcing contracts through stringent regulations, mandatory good manufacturing practice (GMP) compliance, and improved legislation for clinical trials. Still, regulatory bodies will need to clarify the ambiguities in regulatory issues and intellectual property in order to lure more international pharmaceutical companies. Both China and India offer inadequate patent protection. Global pharmaceutical companies stand to lose $450 million every year because of piracy. Both India and China also need to become compliant with World Trade Organization (WTO) standards and other guidelines.

The recent economic slowdown has given the outsourcing trend a large boost by presenting new ways to save money, leverage technology, and ensure revenue growth.



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