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News Release from: Frost and Sullivan | Subject: Outsourcing pharmaceutical R and D study (B600-52)
Edited by the Laboratorytalk Editorial
Team on 05 September 2005
Pharmaceutical firms outsource R and D
to India
The rise of India and China as global economies presents immense opportunities for the international pharmaceutical industry, reveals a study published recently by Frost and Sullivan.
The rise of India and China as global economies presents immense opportunities for the international pharmaceutical industry, reveals a study published recently by market research company Frost and Sullivan Besieged by ever-increasing cost pressures, shorter product life cycles and numerous regulatory challenges in the West, the industry is increasingly shifting its research and development base to these two developing nations, says the study, entitled Advantages and Disadvantages of Increasing Pharmaceutical R and D Outsourcing to India and China (B600-52)
This article was originally published on Laboratorytalk on 2 Aug 2002 at 8.00am (UK)
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This means that pharmaceutical companies are looking at outsourcing to low-cost, developing countries rather than persisting with expensive research and development efforts in the West.
Alliances with local companies, contractual outsourcing arrangements and establishing local subsidiaries are good options for enterprises thinking of utilising the strong intellectual potential in India and China.
"Contract research organisations (CROs) are a popular option and carry out medical and scientific studies on a contractual basis for multiple clients," said Frost and Sullivan industry analyst Himanshu Parmar.
"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".
These outsourcing activities in developing countries amount to 20-30% of total global clinical trials.
Access to specialised skills in both countries and work hours on a 24/7 basis underpins their competitive advantage.
In addition, better management from the start reduces development risks.
Despite these benefits, there has been a relatively low level of utilisation of the opportunities in both countries because of various concerns with respect to quality and infrastructure.
Companies are worried about probable loss of control in processes and proprietary knowledge.
Proper management is needed to utilise complicated and long-distance collaborative third-party relationships.
Delays can even happen through regulatory hold-ups.
This has motivated domestic companies and government in individual countries, keen to increase foreign participation and to figure prominently on the global map, to implement necessary changes to improve clinical research facilities.
"Government commitment in India and China to improve access to high quality health care is a bonus for R and D outsourcing," said Parmar.
"The regulatory environment in both countries is gradually changing in favour of clinical research".
Recent amendments to Schedule Y of Drugs and Cosmetics Rules of India, 1945, signify a progressive attitude on the part of the Indian Government, clarifying the environment for clinical research in the country, says the report.
In China, regular monitoring of clinical trials ensures good clinical practice (GCP)-compliant research centres established by the government.
These steps will enable the two countries attain international standards in pharmaceutical research.
For companies wishing to make best use of the regulatory changes and high quality research, considering alliance strategies and identifying regions of opportunity should be priorities, says Frost and Sullivan.
Embracing these changes through innovative strategies and flexible approaches will allow international pharmaceutical enterprises to capitalise on these new attractive propositions.
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