Indian Pharma Industry - Gaining with Outsourcing and off-shoring

The Indian pharmaceutical market is growing at a rapid pace, increased by more than 10% from 2006 to 2008. Indian companies have driven growth through their role in the international generics business, but are now going through a transition period.
With changes in India’s patent laws and its cost advantages in research and manufacturing,Indian pharmaceutical companies are increasing investment in R&D in order to drive future growth and penetrate the lucrative developed markets of the US and Europe through inhouse innovation.International players have realized the potential of India and are rapidly exploiting the cost advantages of this market to sustain profitability and access innovation. Outsourcing and off-shoring are the leading trends among these players, benefiting from low costs of research and manufacturing.
Under used manufacturing and research capacity is not an option for Indian players if they want to keep their competitive advantage on price. In the past they have not only fulfilled their own product needs but also those of others through the production of APIs. Today, they are not only pure pharmaceutical and biotechnology companies, but also contract manufacturers (CMOs) and contract research organizations (CROs) contracting in non-core activities from players in developed countries aiming to reduce their operating costs. Outsourcing API manufacturing and research activities to low-cost countries has become the preferred strategy among international companies to increase profitability and effectively compete on price with other players in the branded and the generics fields. Released from the burden of maintaining manufacturing and drug discovery bases is already boosting the overall performance in the west.

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