Dishman Ahmedabab is a specialist contract manufacturing company. Jubilant Organosys Revenues of both companies from their contract research and manufacturing services went up by 29 percent and 41 percent respectively in the last financial year. The attention of even formulation manufactures such as Dr. Reddy’s Laboratories, Aurobindo, Lupin and Wockhardt. All of them have started giving more focus to securing outsourcing contracts from Big pharma. For outsourcing drug production, there are many reasons why India is emerging as an inviting destination. A report by Ernst and Young and the organization of Pharmaceutical Producers in India stated that over 80 percent of the 38 big and medium-sized pharma companies across the world rated India higher than China, Eastern Europe, Puerto Rico, Singapore and Ireland.
To grow over 43 percent, E&Y estimates thrice the global growth rate. Research agency Frost and Sullivan estimated this segment for the Indian industry to reach over $6.5 billion by 2013. Most of the top multinational companies prefer only 10-15 establish Indian industry players for contract manufacturing . Ajit Mahadeven, partner of the health science practice, they will soon again with the second and third tier of Indian drug companies. To rope in strategic partners to contain manufacturing and drug development expenses, diminishing numbers of new drugs as against existing drugs going off-patient, high research and development costs and pressure to reduce healthcare costs are forcing BIg Pharma. The India offers a significant cost-quality proposition in end research and development, this is with the potential savings of over 60 percent as compared to the US, coupled with a strong supply of skilled manpower and capital efficiency.
Mahadevan said that they could see even more of global pharma companies adopting different operating models such as captive offshoring dedicated research and development units in partnership fee for services and collaboration or joint venture for the future growth within India. By the US Food and Drug Administration, India has close to 100 manufacturing facilities approved. This is the largest after the US, it is about 40-50 new plants in addition to the plants of the major Indian pharmaceutical companies were commissioned in the past two to three years confirming to the quality standards suggested by the US FDA and the UK Medicines and Healthcare Regulatory Agency.
From up to 200 percent four-five years earlier to just about 15-20 percent with the emergence of so many players, margins have shrunk from up to 200 percent four-five years earlier to just about 15-20 percent. It is obviously why Indian drug companies have been signing outsourcing deals fairly regularly. The world’s largest drug maker, Pfizer, entered into a partnership with a relatively unknown Ahmedabad-based injectable drug manufacturing specialist.
Pfizer will handle the marketing after licensing each product from Aurobindo which will handle all the steps to get approval to make generic version, as well as manufacture these. The second largest drug maker in the world, GlaxoSmithKline entered into a similar alliance with Dr. Reddy’s Laboratories to access the current portfolio and failure pipeline of more than 100 branded pharmaceuticals in the cardiovascular ares, diabetes, oncology, pain management and gastroenterology.
REFERENCE:
http://business.rediff.com/report/2009/aug/17/bpo-big-pharma-cos-join-outsourcing-queue.htm
