Outsourcing to Grow in India

Contact An Agent

Report Predicts Growth for Outsourcing to India

2009-08-20 21:55:10

India accounts for approximately 3% of the global outsourcing market which indicates a significant opportunity for growth according to a report published in early August by Ernst and Young and the Organization of Pharmaceutical Producers of India The report titled Taking Wings Coming of Age of the Indian Pharmaceutical Outsourcing Industry says that the global pharmaceutical and biotechnology industries have not taken full advantage of Indias capabilities because of the countrys intellectual-property regime and its branded-generic market image In response India is attempting to change the global industrys perceptions by building infrastructure instilling a culture of quality and acquiring newer technology capabilities such as biologics cytotoxics and lyophilization for custom manufacturing

In 2008 the global pharmaceutical market grew at its slowest rate of the decade and growth is expected to slow further according to the report Reasons for the slowdown include decreased research and development productivity the global financial crisis increasing generic competition and a dearth of blockbusters As a result outsourcing is now a strategic imperative according to the report Companies are now outsourcing core functions such as development and manufacturing and outsourcing activities are shifting to attractive Asian emerging markets such as India

Indias custom-manufacturing market is growing at a rate of 43% which is three times the global market rate Low manufacturing costs skilled manpower and technical capabilities have contributed to this growth the report says Growth in the North American and European markets is expected to slow down but the growth of emerging markets is predicted to be 1114% from 2008 to 2013 according to the report This growth will benefit Indian providers of outsourced pharmaceutical services

In a survey conducted for the report India ranked highest among six countries for cost-efficiency attractiveness Its technical abilities such as expertise in active pharmaceutical ingredients and formulation are highly regarded In addition 67% of respondents rated India above average on project-management attractiveness and response-time attractiveness

To strengthen Indias position in the pharmaceutical-manufacturing outsourcing market the countrys government has taken or is planning to take initiatives such as streamlining manufacturing- and export-license approvals and establishing memoranda of understanding with organizations such as the US Food and Drug Administration and the European Medicines Agency The government also plans to invest in infrastructure support such as building temperature-controlled areas the report says

India is emerging as a hot spot for drug-discovery and development services as well The market for these services is growing at a rate of roughly 65% which is more than three and half times the global growth rate according to the report Indias strong chemistry capabilities skilled manpower and cost-value proposition have contributed to this growth

The report also notes that the Indian pharmaceutical industry lacks a culture of innovation The country spends much less on research than do countries such as the US Japan and Germany Lower transfer of knowledge and people between industry and academia and a lack of interdisciplinary education have also hampered innovation in India

Recognizing the need to foster research and innovation the Indian government is spending money on publicprivate partnerships promoting collaboration between industry academia and government setting up seven national institutes of pharmaceutical education and research and encouraging Indian pharmaceutical companies to pursue drug discovery and research according to the report