The Hindu Business Line : Pharma cos make a beeline to South

South India's combination of strong pharmaceutical domain expertise and IT skills availability is a strong draw. As region emerges `pharmaceutical services hotspot'

Chennai , Nov. 7

More number of multinational pharmaceutical companies are starting their research activities in south India, which has emerged as "Pharmaceutical Services Hotspot," according to Mr S. Krishna Prakash, Managing Partner, EMA Partners International, a global executive search company.

By 2010, it is estimated that drug trial spends in India will be upwards of $1.5 billion, and a significant portion of this would come to South. They are also looking at India, especially Hyderabad, Chennai and Bangalore, as important "in sourcing centres" (set up own operations), he told Business Line.

Multinational pharmaceutical companies want to save cost and time by conducting one or more of the clinical trial phases in India either through their own centres or by outsourcing, he said.

Several contract research organisations, both multinational and Indian, have already set up shop or are planning to do so in South shortly.

These include foreign companies such as Quintiles, Parexel, Actavis (which acquired Lotus Labs of Bangalore) and Indian companies such as Aurigene, Clinigene and Asian Clinical Trials (ACT), he said.

Companies such as GSK and Pfizer have already started research activities and look at India as an important "in sourcing centre."

Some of the companies have even started to move their research from other parts of the world, he said.

Shift in services

Mr Prakash said domestic companies are moving from offering contract manufacturing to end-to-end preferred service providers. Services offered include manufacturing and formulations by Shasun Chemicals and Divi's Labs, and clinical research by Quintiles, Syngene, Aurigene, ACT and Clinigene, he said.

Further, software majors such as Satyam, Infosys, TCS, and GVK Bio offer bio-informatics and IT services. Similarly, drug discovery/medicinal chemistry is offered by Aurigene, Divi's Labs, Syngene and GVK Bio, he said.

According to Mr Prakash, companies spend $600 million to over $1 billion from over 6-7 years right from molecule to market. Even a three-month advantage could save a company around $50 million, he said.

For example, in clinical research there are four stages - administering trials on healthy volume of large people, testing the sample with small group of patients, testing it later with large group of patients and introducing the product in a small way in the market for any after-effect.

The higher stage a company moves into, higher the investment.

South India is a good region to reduce cost in all of these areas, he said.

Factors

According to Mr Prakash, who specialises in pharmaceutical sector at EMA, features of a hotspot include availability of scientific and technical expertise, sound academic research facilities, free environment where credibility and innovation is encouraged, English language spoken widely and competitive compensation. South India qualifies on all these counts.

Drug development and clinical research efforts increasingly depend heavily on IT support. South India's combination of strong pharmaceutical domain expertise and IT skills availability is a strong draw.

Going forward, there is a likely to be a strong demand for pharmaceutical specialists with discovery/clinical research expertise and for IT specialists with pharmaceutical domain expertise. However, shortage of skilled manpower in all the above areas could be of concern in the long run, he said.

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