The pharma outsourcing industry, both the custom manufacturing and contract research, are poised to grow thrice the global market rate in near future with more global pharmaceutical companies opting strategic partnership with Indian companies when compared to other emerging pharma markets, according to a study.
The study, 'Taking Wings-Coming of age of the Indian pharmaceutical outsourcing industry', released by the leading professional services firm Ernst & Young (E&Y) and the Organisation of Pharmaceutical Producers of India (OPPI) states that the custom manufacturing outsourcing in India is growing at a rate of 43 per cent that is thrice the global market. The growth is driven by the Indian companies' ability to create a differentiating cost value proposition powered by its lower manufacturing costs, skilled manpower and strong technical capabilities.
In a survey conducted to assess relative attractiveness in custom manufacturing outsourcing of six countries - India, China, Eastern Europe, Puerto Rico, Singapore and Ireland with 38 respondents across 17 big and medium pharma companies, 67 per cent of respondents rated India as an excellent destination for cost efficiency in manufacturing outsourcing. India is offering manufacturing services with cost around 35-40 per cent of the cost of manufacturing in the US.
India is also emerging as an attractive destination for drug discovery and development services, growing at 65 per cent rate, which is more than three and half times the global growth rate driven by strong chemistry capabilities, skilled manpower and cost value proposition, says the study.
At present, India lacks a culture of innovation due to legacy issues such as low levels of funding, collaboration between industry, academia and educational infrastructure with India spending only 0.8 per cent of its total Gross Domestic Production on research and innovation. This is much lower when compared to the research and innovation spending of developed countries such as US (2.8 per cent), Japan (3.1 per cent), Germany (2.5 per cent) and France (2.2 per cent).
Further, the country is yet to tap its inherent advantage in outsourcing, whereas India currently has a share of meagre three percent of the global outsourcing market. The global pharmaceutical and biotech industry is yet to harvest the full potential of India's skilled talent pool, strong technical capabilities and cost value proposition, due to the uncertainty in IP regime and its image of generic market. The mindset of global pharma in this regard has been undergoing a sweeping change in recent past, which will benefit India in future, the study says.
