Drug Discovery Companies Turn to Low-cost Asian Countries to Escape Stringent Regulations

Numerous pharmaceuticals and biotechnology companies are weighing the odds of moving production to low-cost Asian countries such as India and China to evade rising cost pressures, regulatory challenges and shorter product life cycles. Since drug discovery involves tremendous risks as well as painstaking research and testing, market participants have invested heavily in emerging markets and processes, as they are glad for any catalyst. Such enterprise is vital in the market since the stakes involved are getting higher. A drug for a previously incurable disease can generate as much as $1 billion in revenues and the first mover in the market can potentially acquire 75 per cent of the market shares.

This Frost & Sullivan research service examines the drug discovery outsourcing market in India and China. The study discusses the major industry challenges as well as market drivers and restraints along with providing a comprehensive analysis of the market. It also includes information on pre-clinical discovery and development as well as clinical development of drugs. The research service enables companies to align their positioning strategies to benefit from the changing market and obtain maximum return on investment.

Outsourcing Fundamental Business Processes Helps Eliminate Redundancies in Production

With greater pressure to retain profit margins, pharmaceutical and biotechnological companies are increasingly looking to outsource business processes in a bid to obtain innovative ideas, maximise the use of existing resources and reduce expenses. Although many companies are still guarded about this new strategy, this concept is likely to catch on in future.

The outsourcing trend received a huge boost due to the recent economic slowdown, when companies sought external pipelines and products to deal with the intense pressure of drug discovery. In such a scenario, outsourcing presented new ways to save money, leverage technology and ensure revenue growth. "Outsourcing is likely to enable companies to use and control their R&D expenditure more effectively and to focus on their core competencies," says the analyst of this research service.

Proactive Government Policies Propel the Drug Discovery Outsourcing Market

The Indian and Chinese drug discovery industries are evolving, with both gaining an edge in the global arena by producing a continual pipeline of drugs that are approved faster than those produced in Western countries. Proactive government policies in recent years such as stringent regulations, mandatory good manufacturing practice (GMP) compliance and improved legislations for clinical trials provide further opportunities for both countries’ business models to outstrip competition. New methodologies can facilitate radical improvements in efficiency, contributing to enhanced quality data and higher speed at a fraction of the cost by dislodging traditional practices and processes.

"Governments' initiatives to diversify the industry’s drug discovery portfolio and develop infrastructure are expected to drive the growth rate of the $7.3 billion drug discovery outsourcing market in India and China," notes the analyst.