Tuesday, May 22, 2007

The wave of Pharmaceutical Outsourcing Rocks India

If you've been under the illusion that outsourcing to India is limited only to software development and IT, it's time to sit up and take notice. Outsourcing to India is no longer taking baby steps in the field of Information Technology, but has stepped beyong it's boundaries to encompass various fields, including Pharmaceuticals.

Global Pharmaceutical companies that find themselves in financial need, and wanting in time, to carry out the various functions that make for successful working of a business, have made overtures to India for their research-and-development activities.

The only concern the Indian Government holds is that India must not be turned into a testing ground for other countries. Any opening or initiating move toward negotiations and a new relationship, must be in accordance with the bio-ethical guidelines, while steering clear all vagrant methods.

India is home to as many resources as 16,000 hospitals, 171 medical colleges and a considerable grouping of patients. These together make clinical trials a matter of brief duration, hence saving time and money. Japanese pharmaceutical company Eisai Co Ltd is one of the first to take advantage of the opportunity at hand. An investment of US$2.2 million is devoted to the process of manufacturing and carrying out clinical trials in India.

With companies looking eagerly to India as a busiess cluster that may provide a resolution for their manufacturing and other needs, the new regulations made effective by the Indian Government may stunt the growth of manufacturing in the pharmaceutical sector, in India. Excise duty on all drugs and medicine will now be payable at their retail price. Untill now, pharmaceutical companies saved on excise by getting their products manufactured on contract basis, so that the duty was being paid on the sale price to the company, and not the sale price to the wholesaler, which exceeds the common degree of profit garnered.

This may be a bitter pill for Pharmaceutical outsourcing, but the scope is much larger and the opportunities are vast. The roadbumps will come and go but the outsourcing industry in India with all the benefits it offers to global conglomerates, is here to stay!