Driven by increasing R&D costs, which in turn will compel pharmaceutical organizations in the US and EU to look for new low cost R&D destinations such as India and China, the Indian pharmaceutical off-shoring industry is slated to become a USD 2.5 billion opportunity by 2012, according to a study conducted by Zinnov Management Consulting, one of the leading management consultancy firms in India.

The study, 'Indian Pharmaceutical Offshoring Landscape', provides a detailed analysis of the Indian pharmaceutical offshoring industry. According to the study, the Indian pharma sector is also growing robustly and is expected to move from being domestic led to exports driven by 2010. A transition is also being observed in the growth of pharmaceutical markets from the top seven established pharmaceutical markets to emerging markets like India, China, Brazil, Mexico, South Korea, and Russia - which will grow at 12 to 13 per cent in 2008, and become a USD 85-90 billion market, captures the study.

Talking about the study, Pari Natarajan, CEO, Zinnov Management Consulting, says, "Influx of outsourced work from global pharmaceutical companies has given the necessary impetus for the creation of pharma Special Economic Zones (SEZ), which would be one of the key drivers of outsourced pharmaceutical services growth in the coming future."

"Indian pharmaceutical companies need to penetrate further in generics market in regulated countries and also increase their investment in R&D to move to gain expertise in higher value chain processes. Today, pharmaceutical is one of the most happening industries globally, and India has the potential to become one of the key global pharmaceutical players and also become the backbone of off-shored services in Pharmaceuticals," he added.

The success of pharmaceutical off-shoring or outsourcing is aided by the rich pharma talent pool and the spread of pharma-educational institutes. The government has also provided tax incentives to the pharmaceutical industry and has taken necessary steps to enact tough laws on data security and IP related issues to mitigate certain off-shoring challenges. Development of pharma SEZs is a key step by the Government to enable the growth of pharma industry, finds the study.

"Zinnov has deep understanding of the drug development chain and over the years, has played a key role in helping many pharma companies analyze the pharmaceutical market at both India and Global level. Clinical trials today dominate the development offshoring market landscape followed by clinical data management. Marketing and sales is another key component of pharmaceutical drug development value chain and is currently a USD 100 million market, which is expected to grow at a CAGR of 36 per cent till 2012," said Rishikesh Mandilwar, director, Zinnov Management Consulting Pvt Ltd.