Despite the cost advantage in India, several leading contract research organisations (CROs) in the country are increasingly exploring business prospects in overseas markets, especially the US, UK and some other European markets with a view to attract more customers offering multi-centric trials.
Companies such as Accutest, Veeda, Siro Clinpharm, Lambda Therapeutics, Synchron Research and Manipal AcuNova already have presence in various international markets and are actively looking for further expansion. It is learnt that several other players are also actively planning to expand into new geographical locations.
According to industry sources, several factors contribute to the increasing rush of Indian CROs into the developed countries. Though companies are coming from US and Europe to India for outsourcing clinical trials, small and mid cap biotech companies are hesitant to exploit the cost advantage due to the physical distance. It has urged the Indian CROs to be present in these markets, either by setting up an entity or acquisition, which would be giving the local companies confidence and conducting trials in India.
More over, as per the sources, the market has undergone various changes and more and more companies want a 'one stop shop' for drug development. Often sponsors require data from different patient populations in different geographical locations and want a complete suite of services. Even though India has plentiful smart hard working people, there are only limited numbers of people who have experience in developing new drugs. By combining the strengths of India and the West, the companies are expected to add value their services.
Commenting on the development, Dr Anand Bidarkar, vice president, service delivery, Siro Clinpharm, said, "Indian companies are moving into Eastern Europe and other countries, mainly because of the varied gene pools present in these places. If present in India, Europe and other parts, companies can cover the entire spectrum of gene pools. Some of the trials required to be conducted in various geographical locations, as many of the pharmaceutical companies are present in different geographical locations. More over, pharmaceutical companies in those countries can have a direct access to the CROs."
Observing the trend Hitesh Gajaria, executive director, KPMG India, said, "As India is set to capture a larger share of the global contract research opportunity in the coming years, it is becoming increasingly important for Indian CROs to build competencies beyond their inherent technical strengths in order to compete with other countries such as China, Singapore and Korea. Hence many Indian CROs are expanding into the US and European countries as geographic expansions offer a presence in their major markets and allow them proximity to their clients. This could go a long way in building sustainable long-term client relationships, a crucial factor for the success of any CRO".
He further added that the presence in regulated markets brings in higher quality standards and facilitates regulatory compliance. Hence a presence in regulated market strengthens the company's position as the preferred outsourcing partner and gives it a competitive advantage over other players.