India, China favourite drug discovery outsourcing markets
1/20/2006
The Indian and Chinese drug discovery outsourcing market is riding a crest with companies from outside Asia increasingly seeking to outsource drug discovery to these countries for greater cost savings, says a new research report from Frost & Sullivan.
Global pharmaceutical manufacturing was worth nearly $50 billion in 2004, and India and China have the potential to garner around 35 to 40% of the outsourced market share.
The $7.3 billion Indian and Chinese drug outsourcing discovery market is evolving, with both gaining an edge in the global arena by producing a continual pipeline of drugs, which are approved faster than those produced in western countries.
“Governments’ initiatives to diversify the industry’s drug discovery portfolio and develop infrastructure are expected to drive the growth rate of the drug discovery outsourcing market in India and China to reach $19.8 billion in 2011,” says Dr Amarpreet Dhiman, EMEA Drug Discovery Technologies Team Leader at Frost & Sullivan.
Other major factors driving this shift to Indian and Chinese companies are the better access to expertise, productivity gains, process improvements, variable costs, avoidance of capital outlays and opportunities for companies to focus on specific niches, the report said. Both countries are uniquely positioned to manage and deal with the pressures to enhance clients’ profitability, increase shareholder value and utilise the potential of new drug discovery technologies.
The report further says that the governments of these countries have also proactively worked to attract outsourcing contracts through stringent regulations, mandatory good manufacturing practice (GMP) compliance and improved legislations for clinical trials. However, regulatory bodies will have to sort out the ambiguities in regulatory issues and legislation of intellectual property (IP) rights to lure a greater number of international pharmaceutical companies, the report added.
Both countries have inadequate patent protection, which can discourage global pharmaceutical and chemical companies, especially those from the United States, which stand to lose $450 million every year due to piracy. “The development of patentable products requires healthy investment in R&D and suitable confidentiality of results to develop a strong IP portfolio,” says Dr Dhiman.