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Study: India outsourcing potential in pharma R&D

Study: India outsourcing potential in pharma R&D

A new study by a leading outsourcing researcher indicates that India-based patent services will benefit from increased activity in pharmaceutical R&D offshoring. With pharma firms eager to maintain their market positions by developing new drugs, the sector's total outsourcing opportunity is estimated at $40-50 billion.

According to the study, technological developments have fixed the research field, bioinformatics, as the main driver for this latest surge of R&D. The analysis method uses applied mathematics and computer science to predict how drugs will work at molecular level – and is, itself, becoming a major subject of offshoring to India. Pharma firms will be looking to Indian outsourcing providers to handle the IP logistics that flow from bioinformatics research.

'Pharmaceutical companies are under constant pressure to develop new blockbuster drugs to replace older ones that are going off patent,' says the study. 'With costs to launch a new drug crossing $1 billion and the number of drugs approved for commercial launch decreasing, pharmaceutical companies are increasingly looking at biotechnology to deliver results.'

The study puts global R&D expenditure by pharma firms throughout 2007 at $100 billion, and states that drug discovery, clinical trials and 'allied activities' – such as IP – accounted for a 30-35% share of this figure. It points to a highly lucrative future: while current levels of offshoring for major pharma firms are low, they are expected to show a compound annual growth rate of 10-15%. Offshoring by medium-sized pharmas is tipped to balloon after 2010.

'The implementation of IPR in India from January 2005 is gradually bringing global companies to India … for discovery services involving sensitive data,' says the study. 'Going forward, the wide variety of opportunities and their diverse nature will attract many new vendors [and] encourage existing vendors to widen their service offerings.'

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