India is witnessing growth in outsourcing opportunities in wide areas. India has already proved its strengths in R & D, manufacturing and clinical research outsourcing. It is now geared to capture a significant share in the global outsourcing sector.
The global contract R & D segment was estimated to be $14.5 billion in 2004 which is estimated to increase to $21.9 billion by 2009. Contract manufacturing of prescription drugs globally was valued at $26.2 billion 2004 which is likely to touch $43.9 billion in 2009, biologics was worth $1.7 billion in 2004 which has scope to grow to $4 billion in 2009, while OTC products was at $59.7 billion in 2004 which is expected to take a quantum jump with $102 billion in 2009.
Growing investment in biologics, bio-generics in some markets, major drugs going off-patent, increasing generic penetration, growth in clinical trial size and several financial factors are driving growth of contract manufacturing outsourcing, according to Rajiv Shukla, senior director, Business Development, Global Research & Development, Pfizer Inc.
Logistic feasibility, capital cost, operating expenses, IP risk, disruption to business continuity, productivity impact, time to function, access to talent pool and consistency of processes across sites all become part of the criteria on which the decision to outsource is usually taken.
Pharma companies may establish mature partnerships which are characterised by single sourcing from dedicated resources, mutual dependency, shared risk / value measures, joint R & D, exclusive rights, proper communication plan and transparent measurement. While in developing partnerships there will be single / dual sourcing, joint focus on cost and quality, managed risk and technology sharing.
There are various models of outsourcing. Activity outsourcing is focused on a specific technological area (chemistry, biology or bio-analytical) which focus on productivity and cost. This model is pre-dominant in India and China. Wuxi, Medicilon, GVK and Chembiotek are some of the companies that collaborate in this model, he added.
Target based outsourcing which enables partial integration of outsourcing activities where supplier brings unique capabilities and also enters risk sharing deals. Such models are just beginning in Asia.
AstraZeneca and Torrent pharmaceuticals entered into 50:50 joint research partnership in developing a drug for hypertension. The partnership involves success-based milestone payments to Torrent and royalties on the drug after commercialization, Torrent to get co-marketing rights for the product for India, AstraZeneca helped develop, train Torrent to achieve required skills in pre-clinical stage.
Lilly tied up with Jubilant Organosys for five-year collaboration for discovery of NCEs in CV, CNS, Diabetes and Oncology. Jubilant is to identify lead candidates, work out medicinal chemistry and take the NCE up to clinical trials stage, receive fees and milestone payments, while Lilly will retain all IP.