India’s outlay on pharmaceuticals to reach $ 16 billion by 2015

India’s outlay on pharmaceuticals to reach $ 16 billion by 2015 says The Boston Consulting Group

The Boston Consulting Group today launched Looking Eastward- a report which explores the opportunities offered by China and India to reinvigorate the global biopharmaceutical industry. As threats to their profitability loom, multinational pharmaceutical companies (MPCs) are increasingly looking at offshoring R&D to China and India to help them increase productivity and reduce costs. While historically the biopharma industry has lagged in hopping on the offshoring bandwagon, it is catching up as the regulatory and competitive environments in both countries improve.

Speaking on the launch, Mr. Paresh Vaish, Vice President  & Director said,” The India pharmaceutical is posed for growth and the report highlights the benefits offered by both India and China for multi national pharmaceutical companies. The wise path is one of planned engagement, defining a medium- to long-term R&D offshoring vision that harmonizes with the company’s global R&D strategy.”

To help guide companies in developing a strategy, the report provides an in-depth review of the current state of play in biopharma in China and India, as well as the primary benefits and risks associated with offshoring R&D in both countries. In addition, it shares a wealth of data, case experience, and analysis on the specific opportunities afforded by both China and India and across the R&D value chain.

Both countries hold great opportunity to meet the R&D productivity challenge. But to most effectively create value through offshoring in both the short and the long term, companies must see the big picture and build an integrated strategy that balances the advantages and the risks. Whereas many R&D activities currently offshored to China and India have been launched and managed in an ad hoc fashion, those companies that carefully implement a more integrated and deliberate strategy will have the greatest advantage in the future, The Boston Consulting Group (BCG) concludes in its recent report, Looking Eastward: Tapping China and India to Reinvigorate the Global Biopharmaceutical Industry.

An effective off shoring strategy will have to be flexible to accommodate constant shifts in both countries’ R&D landscape—including shifts in capabilities, availability, and risk factors. At the same time, MPCs will need to accommodate changes in their own internal environment, including budgetary constraints and the corporate appetite for risk. This applies whether an organization is just starting to explore the opportunities in China and India or has already been down the off shoring road a number of times.

Basis research and experience the report has developed a three-part framework to help MPCs build their strategy and execute it. The key elements of this framework include developing a range of scenarios to help define the vision, choosing the optimal business model and migration path for the company, and ensuring rigorous implementation with appropriate precautions to manage the risk. Besides this, the report includes a number of case examples and best practices to highlight what drives success.

MPCs’ offshoring strategies should involve both countries in both the near and the longer term, but China and India require differing business models. For example, outsourcing some of a company’s ‘excess’ leads to India is a great way to quickly ease bottlenecks and access a broad and reliable vendor base. In contrast, the optimal business model in China is generally the captive R&D center, which helps ensure a stake in that country’s huge potential market in the longer term. These and other potential business models must be evaluated against the specific company’s needs.
Looking Eastward: Tapping China and India to Reinvigorate the Global Biopharmaceutical Industry is the latest in a series of BCG reports examining R&D productivity in the pharmaceutical industry. Together with this in-depth analysis, four previously released companion reports help companies tackle the underlying issues of R&D productivity and the path to increased value. Two recent publications in the series separately cover the opportunities in China and India, while the others examine the broader framework and additional approaches to enhancing productivity in biopharma R&D.