The Lifesciences Forum and Tie WIN jointly organized a panel discussion on Lifesciences, Outsourcing, and Growth Opportunities in India on February 17, 2005 at MIT. The panelists consisted of Dr. Govinda Rao, Vertex Pharmaceuticals, Dr. Anil Khurana, Access International Partners, LLC, John Serio, Attorney, Brown Rudnick Berlack Israels, Dr. Nick Terrett, Pfizer Inc., Howard Schneider, ABLE Labs and Dr. Jugnu Jain, Vertex Pharmaceuticals, who also served as the moderator. It was a sold out event with over 100 people in attendance.

The overall theme of the panel discussion was that the U.S. biopharma industry is facing several emerging challenges and there is a need for a new business model for the industry. As R&D costs escalate and R&D productivity stagnates, pharma companies are facing increasing pressures to outsource several tasks and R&D processes. At the same time, India’s emerging lifesciences industry has demonstrated nascent capabilities in both discovery and clinical development, and promises to provide a complementary set of capabilities to U.S. and European biopharma companies. With the enforcement of the WTO TRIPS agreement in January 2005, intellectual property (IP) issues are expected to become less of a hurdle, potentially triggering a dramatic shift in the global biopharma industry.

According to Govinda, for every dollar of outsourcing from US to India, there is $1.46 of net benefit to the global economy. Currently most of the outsourcing is focused in the areas of chemical synthesis, process chemistry, API and API manufacturing and medicinal chemistry (lead optimization). The current overall global outsourcing was $1.63B in 2003 and is expected to grow to $3.53B by 2007. There are various models of outsourcing including US company/European CRO, US CRO/Indian CRO and others. Some of the risks with outsourcing include loss of control, regulatory risks, leaking Intellectual Property and dishonoring exclusivity agreements.

Anil Khurana presented the current basis for large pharma companies for locating their R&D centers around the globe which include technical know-how, market proximity and low cost. The low cost regions typically focus on generics, clinical trials and limited research. Long-term roles for the R&D centers and the viability of the markets in low cost centers are important factors to consider besides cultural and quality differences and IP related issues. With the TRIPS agreement in place, which is a new agency (tribunal) being set up outside the court system, IP issues should be resolved to a large extent.

“With outsourcing is a growing need for US lawyers and legal services,” said Serio. This stems from the need of converting Indian patent applications to meet international standards and designing new patents around existing patents.

Nick talked about the Pfizer’s Cambridge R&D center as a form of outsourcing to tap local talent. Large pharma companies are always looking for opportunities with respect to quality, speed and cost effectiveness both internally and externally. CROs provide cost savings and flexibility in resourcing, when needed.
 
Jugnu discussed that the number of patents filed in India by Indians was on the increase while those filed by foreign applicants were decreasing. Also, most of the pharma in India were involved in drug manufacturing and chemistry not drug discovery, validation or biology.

Howard Schneider’s comments were mainly focused on CROs (Clinical Research Organizations), which are rapidly growing in numbers (more than 20 in 2004). Besides doing clinical trials, these independent companies doing some of work that is best suited to be done there such as investigator and site selection, regulatory interface and study monitoring. “Reducing cost is not the sole reason for partnering with CROs. Other benefits include scientific excellence, speed (time to market), wide spectrum of targets, disease options and global regulatory acceptance,” said Schneider.

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