The global pharmaceutical industry should be prepared to deal with many more challenges in the years to come although it is already passing through a bad phase, according to TS Jaishankar, chairman, Confederation of Indian Pharmaceutical Industries (CIPI).

Some of the issues, industry is currently facing are the expiring patents, drying up of pipelines, lower returns on investment, urgency of new drugs and the need to access broad patient populations. This stark reality has prompted a wave of off-shoring by top multinational firms.

While speaking at the AU-KBC Research Centre of Anna University on the subject 'Business Trends in Clinical Research', he said that as the world becomes increasingly globalized, the pharmaceutical industry must respond to the newly emerging challenges. For the research and development effort (R&D), which is the lifeblood of the industry, an amount of $49.3 billion, or 10 to 15 per cent of total revenues, is being spent annually.

Since pharma industry is one of the richest and most innovative industry segments in the world, it is also creating opportunities for large scale employment. In the year 2003 the industry employed approximately 1.7 million people in various categories and has since grown by 5 per cent every year. The career opportunity of the industry is concentrated on three main areas such as commercial, manufacturing and research &development. These three areas altogether constitute near about 86 per cent of the total employment opportunities. Of the workforce, sales agents represent the largest percentage which is 35 per cent in total.

Unlike many industries, the pharmaceutical sector has to invest its core competency namely, R&D, which represents 74 per cent of off-shored employment. This R&D wing covers a variety of areas but the activities currently outsourced from less developed nations is clinical trials, data management and medical writing. The pharmaceutical industry has recognized clinical trials as an area with the greatest potential for cost saving.

Jaishankar said the cost for developing a new pharma product increased from $131 million in 1987 to $802 million in 2001 (chemical components, formulation developments, analytical methods, pre-clinical developments and phase-1 to phase-3 trials). For every one hundred drugs that enter into clinical studies, 30 per cent of them will be rejected during phase-I trial, further 37 per cent during phase-II, 6 per cent in phase-III, and an additional 7 per cent during the regulatory review period. And only 20 per cent of the drugs that reach the stage of human trial are approved for marketing.