Biopharm

A few weeks ago I was speaking with the CEO of an India-based pharma services company. As we discussed the current twin trends of outsourcing and off-shoring in BioPharm, we kept drawing comparisons to the Information Technology industry.

He and I each spent the first part of our careers in the IT industry and witnessed first-hand its phenomenal growth in India. [In less than a decade, India became a $15 billion dollar per year IT outsourcing powerhouse.]

Clearly, the BioPharm industry is headed in the same direction. Some critics have already said that the outsourcing trend is stalled, but I believe that we are still in the early days of what will be a dramatic shift in how clinical trials - and later all aspects of drug development – are handled. The parallels between IT and BioPharm outsourcing are too many and too strong to suggest otherwise:

1. Public Sector Support

Just as the IT boom was sparked by a pro-business change in government policies, so too is the BioPharm market being driven by strong governmental support, including the creation of intellectual property protection laws, economic development zones, and relevant university curriculum.

2. Global Demand

Of course, demand from global corporations played a large roll in the IT boom. Likewise, the BioPharm boom is led by major industry players.

Eli Lilly was one of the first companies to conduct clinical trials in India beginning as early as 1993. Now Eli Lilly India (ELI) has over 17 clinical research projects running in 40 hospitals across the country. ELI Managing director Rajeev Guilati says, “With a favorable policy supporting us, our clinical trials in India will accelerate.”

Pfizer was also an early pioneer in India and is currently making major investments in their clinical research program. Dr. C. N. Potkar, Pfizer’s director of clinical research noted on the company’s website, “We have gradually increased our activity spectrum across a range of therapeutic areas. A group of about 40 clinical research professionals is engaged in conducting Phase II through IV studies.”

Pfizer is now conducting more than 20 studies around India and has sponsored more than 40 GCP workshops for more than 2,000 clinical investigators.

GSK, Roche, and Sanofi Aventis have also been early adopters. All are making major investments in their clinical trial programs in India.

3. Growing Acceptance

As happened in the IT boom, smaller firms are following suit. Emisphere Technologies, Inc., a Boston BioPharm company targeting diabetes and other therapeutic areas, recently completed a Phase II clinical trial in India. In a press release, Dr. Michael Goldberg, CEO of Emisphere, noted “This important achievement could not have been accomplished without the dedication and commitment of…our expert collaborators…. We were pleased with the quality and performance of our contract research organization, iGATE, whose execution skills were excellent throughout the study.”

For companies of any size, a low-cost high-value strategy is a competitive imperative – and outsourcing to India is the logical solution. India’s robust communications infrastructure and well-educated medical staff can help both generic and innovator companies speed more drugs to market for a smaller total cost.

4. Education is Key

Just as Indian technologists and programmers are renowned for their intellect and creativity in IT, the world-class Indian educational system is producing more and more well-trained biologists, chemists, and physicians. The Ministry of Health has recently allocated over $1MM for developing training centers to support the growing pharmaceutical services sector. Universities are adding more and more classes in drug discovery, development, and clinical trial areas.

5. Leapfrogging Technologies

Although India is perhaps best known as an exporter of talent, it is equally true that Indian firms quickly developed leading edge capabilities. Thanks in part to government economic development zones (EDZs), Indian entrepreneurs are quickly picking up the mantle and rolling out world-class laboratory and clinical facilities.

One EDZ, known as “Genome Valley” just south of Hyderabad, is home to a growing number of Indian (and foreign) BioPharm firms. Veteran Indian CRO Vimta Labs has just completed a 200,000 sq. ft. state-of-the-art analytical facility catering to North American drug manufacturers.

Next door to Vimta Labs is RCC (India), Ltd, the Indian subsidiary of the Swiss non-clinical research company RCC, Ltd. RCC will conduct animal toxicology studies in a new 100,000 sq. ft facility.

6. Friendly Regulation

A watershed event for the Indian IT industry occurred in the early 1990s when India abolished many of its long-standing socialistic policies and loosened controls on investment and industry. As evidence of the Indian government’s enthusiasm for promoting the clinical trial industry, something similar is happening at the Drugs Controller General of India (DCGI). Newly approved procedures create two categories of clinical trials: those with protocols approved by other Competent Authorities (including CA’s in the USA, UK, Switzerland, Australia, Germany, Canada, South Africa, Japan, or the EMEA countries), called “Category A” trials; and those without such approval, called “Category B” trials.

Based on the current volume of protocols being handled, the DCGI has committed to completing reviews of Category A protocols in just two to four weeks. Category B protocols may require 12 to 14 weeks for DCGI review.

7. Resource Squeeze

Not all similarities between IT and BioPharm are positive, of course. The recent increase in clinical trial activity puts qualified staff in high demand. Because the country’s history with clinical trials is short, CROs are recruiting from a limited number of CRAs, Project Managers, and Data Management professionals. As in the IT industry, headhunting and poaching from competitors is becoming common practice.

The flip-side of this situation is that India is beginning to draw many of its ex-patriots back home. Highly skilled physicians, medical directors, and clinical pharmacologists who left in search of employment abroad are now returning to India as more and more advanced positions become available in this burgeoning industry.

Vast Potential Ahead

From his newly expanded facilities in Mumbai, Dr. Vasu Ginde, the CEO of iGATE Clinical Research, recently summarized the situation. “Clinical research in India is still in its early days,” he said. “But this is the time to ensure we create the best delivery platform in the world. Being a late starter has its own advantages. We can look around and learn from the mistakes other countries have made, then work hard to ensure we build the clinical trial industry in India to be world-class.”

If the IT industry is any predictor, India is well on its way to becoming a global player in the life sciences, and Dr. Ginde’s words will certainly come to fruition.

Jim Worrell is the CEO of Pharma Services Network, Inc. in Charlotte, North Carolina. PSN provides BioPharm sponsors with strategic global outsourcing resources, including access to specialty CROs and their patient populations.