October - December 2006 Vol 2 Issue 11
Brainwave      Insight      Technova      Perspective      X'Pressions     


Opportunities unfurling………….
………….Outsourcing moneymaking !!!

Indian economy is growing leaps and bounds as far as matter of outsourcing is concerned whether it is in pharmaceuticals, engineering services, legal support or any other .Patent outsourcing includes technical research, proof reading, prior article search, drafting patent application, patent amendments among others. This includes a huge amount of research for patents being filed in US courts. Some Indian companies have already targeted the opportunity, specialising in patent outsourcing.

India can now boast about its graduates who are in great demand by the various outsourcing companies as being having an edge over their foreign counterparts in the respect of education , diligence, and payments. While major firms in the US quote up to $15,000 for preparing and filing a patent application, companies based in India deliver the same work for $2,500-3,500 in India. This allows companies to file additional patents within the same budgets. Thus there are vast opportunities with good salary to the Indian youth who are well educated and inspite of that do not get jobs of their satisfaction. This does not implies that they become just money making dummies but they also have research opportunity open for them at the same time. Here, a brief review on the pharmaceutical ( CROs ) and legal outsourcing ( LPOs ) is being summarized .

The Indian pharma industry has strengthen the economy a great deal in a very short time. Today the pinnacles in the sensex have been greatly contributed by the pharmaceutical industry. Emphasizing here on the trends of outsourcing which has crept into the pharma industry as well is now a big resource generator for the Indian economy .

And as multinational drug companies in the United States and Western Europe look east to outsource research and clinical trial activities, countries such as India will gain proficiency and expertise, assisting its move from generic and specialty contract manufacturing to innovative drug discovery and development in its own right, setting the stage for increased global competition.

India's pharmaceutical companies are shifting from "business-driven research to research-driven business".The next 12 to 24 months represent a turning point in India's pharmaceutical industry and its integration into the global market.

India has long been a formidable player in pharmaceutical manufacturing, with Indian companies producing some 22% of the world's supply of generic drugs, according to the Indian Pharmaceutical Alliance (IPA). By 2007, India will capture a third of the world's generic drug business, predicts the IPA, which represents India's 13 leading pharmaceutical companies, including Ranbaxy Laboratories Ltd., New Delhi, (the country's largest, with $1 billion in annual revenues), Dr. Reddy's Laboratories Ltd., Hyderabad, and Nicholas Piramal India Ltd., Mumbai.

Indian companies were responsible for submitting nearly 21% (73 of 350) of all abbreviated new drug applications (ANDAs) to the FDA last year. This is expected to increase to about a third of the anticipated 500 ANDAs this year, according to a report by Credit Lyonnais Securities. Indian companies also accounted for 25% of submissions to FDA's Drug Master File (DMF) in the fourth quarter of 2003. DMF approval is a prerequisite for exporting a drug to the United States. The DMF filing gives details about a company's facilities for manufacturing, processing, and storing drugs.

India's expected climb up the value chain from generic and contract manufacturing to innovative drug discovery is based on a confluence of circumstances, including India's agreement to honor international patent laws and intellectual property rights starting next year. When this happens, other companies will be more willing to enter into collaborative R&D arrangements once the threat of legal copying is removed. Another major advantage India has is its 3 to 4 million scientists, the second largest concentration in the world following the United States. Many of these scientists are English-speaking, and most are willing to work for a fifth of the salary of their counterparts in the West.

India also can boast of having more than 70 FDA-approved plants and 200 manufacturing facilities certified as having good manufacturing practices, more than any other foreign country. Big pharma is hoping to capitalize on the cost savings by shifting some research activities to India. Last year Ranbaxy entered into a collaborative agreement with GlaxoSmithKline (GSK), Brentford, UK, to develop new chemical entities for select therapeutic targets using GSK's libraries of patented molecules. GSK will conduct clinical trials and market successful drugs, and the two companies will share the profits. Ranbaxy also has an exclusive licensing deal with KS Biomedix, now Xenova Group Plc., Slough, UK, to market a new biopharmaceutical to treat brain cancer.

Combine India's abundant supply of skilled yet inexpensive English-speaking scientists with excellent facilities, and factor in the country's large and diverse population, and you have a strong competitive advantage for conducting clinical trials. It costs an average of $170 million to conduct the three phases of clinical trials in the United States, according to Rabo India Finance, but companies in India can do it for 50 to 60% less.

Operating in this arena are local clinical research organizations (CROs), such as Clinigene International Pvt. Ltd., Bangalore, and SIRO Clinpharm Pvt. Ltd., Mumbai. Clinpharm recently formed a partnership with Covance Inc., Princeton, N.J., one of the world's largest CROs, to conduct clinical trials. Other international CROs, such as Quintiles Transnational Corp., Research Triangle Park, N.C., have set up shop in India, while Indian subsidiaries of Eli Lilly, Pfizer, and other big pharmas conduct their own trials in-house. Officials in each company cite the high standards of medicine and the relative ease in recruiting patients, especially compared to the United States, as reasons for interest in India.

But India isn't the only new venue for large international CROs. Covance has begun conducting clinical trials in Russia, Poland, and Hungary. As with India, advantages include good medical facilities, ease of recruitment, and a local force of doctors and nurses eager to earn more money than would otherwise be available through routine practice.

The Indian government has given clinical trials a boost by approving an amendment to Schedule Y of its Drugs and Cosmetics Act, allowing international drug companies to conduct multi-center phase I and II trials throughout the country. The amendment also provides for recombinant DNA and other products, which could be a major incentive for global biotech companies to conduct clinical trials for biologics in India.

Legal Process Outsourcing (LPO), a niche segment within the Knowledge Process Outsourcing (KPO) space, is attracting international law firms who are outsourcing legal work to India. Within the LPO industry, it is patent outsourcing, which is catching up faster than the rest of LPO jobs.

According to Nasscom estimates, the legal offshoring segment of the Indian BPO industry is worth about $60-80m. It also estimates that the industry has about 50-60 firms that employ about 700 lawyers. Though cost arbitrage is definitely the most attractive proposition, patent work is coming to India as US and UK law firms are facing a talent crunch.

It is estimated that about 35,000 attorneys in the US work on intellectual property-related issues, but the increasing workload will ensure more offshoring for non-core services. A lot of companies too are cashing on this trend.

At any given time, the quality of lawyers and engineers in India is far better than their counterparts in US or UK. This is the biggest advantage as we provide quality at a cheap price,” said Sanjay Kamlani, co-founder and joint-CEO, Pangea3.

LPO salaries range from Rs 25,000-30,000 per month for a fresh law graduate. Interestingly, players in the segment say that the curriculum in Indian law colleges is comprehensive. Looking at the growth opportunity, LPOs are keen to move up into patent outsourcing.

by Manish Mishra, M.Tech.(Bio-Informatics) 3rd Sem IIITA