Chowdhury Outsourcing Biopharma R&D to India

1. Auflage 2011
ISBN: 978-1-908818-01-0
Verlag: Elsevier Science & Techn.
Format: EPUB
Kopierschutz: Adobe DRM (»Systemvoraussetzungen)

E-Book, Englisch, 130 Seiten

Reihe: Woodhead Publishing Series in Biomedicine

The trend of outsourcing to India for research and development is catching on fast. Over the last decade, worldwide pharmaceutical and biotechnology companies have made India their choice for a research destination. Initially R&D was inclined more towards developing products for the Indian market within the country. This led to several multinational companies opening up production plants in India, primarily due to the globalization of the Indian economy and offshoring jobs to India. Alongside, several global pharma-biotech majors ascertained large market requirements within the country and capitalized on the advantage of serving Indian customers. Strategies were devised to optimize operational expenses with the setting up of on-site R&D to develop products for local requirements. In view of this, this book seeks to explore various nuances of the outsourcing sector with respect to biopharma in India. - Constitutes the first ever comprehensive insight on the Indian biopharma sector - Provides a perspective based on practical hands-on legal experience - Simply structured, clearly presented and free from excessive legal jargon

Probir Roy Chowdhury is Senior Associate of J. Sagar Associates, and is part of the firm's Technology Practice Group. He advises on Information Technology Law in areas including outsourcing, data protection, and e-commerce issues, and his transactional practice includes advice on venture capital fund structuring, transaction structuring, legal due diligence exercises, investment in the education sector, entry strategies and foreign exchange regulations. He writes on several technology-related subjects, and has contributed to the United Nations WSIS Summit project on Technology Surveillance as well as chapters in Advances in Biopharmaceutical Technology in India published by BioPlan Associates Inc. He is a regular contributor to the Computer Law Review International.

Autoren/Hrsg.

Chowdhury, P R

Leseproben

1 Biopharma outsourcing in India: its evolution
Abstract:
Biopharma outsourcing involves a foreign entity partnering with Indian CMOs/service providers for research and development. This chapter discusses the various models employed in biopharma outsourcing and which model is more suitable to which type of business. This chapter introduces the reader to the Indian regulatory framework relating to the biopharma industry, and the likely issues and hurdles which may be faced by the parties during the outsourcing process. Keywords research and development (R&D) product process services goals models competitive advantage cost strategic partnership joint venture captive direct regulatory environment authorities 1.1 What is outsourcing?
Outsourcing in literal terms means ‘sourcing from outside’. It is the process whereby two companies enter into a long-term, result-oriented relationship, where one company delegates or contracts out all or some of its services to another company. The other organisation is usually in a different physical location or another country altogether. Outsourcing is an efficient way of exploiting the cost advantage available in another country; however, business organisations may choose to resort to certain other processes, for example: • offshoring: the relocation of business processes to an entity in another country, which may even be a foreign subsidiary of the parent company. • sourcing: the process of entering into short-term contracts with suppliers for obtaining products or services required by the acquiring organisation. • subcontracting: the creation of a short-term contractual relationship by a contractor with a subcontractor, whereby the subcontractor makes no investments. • re-engineering: ‘redesigning and restructuring of business processes’, which involves rethinking of business activities, information flows, and organisational forms from a whole-systems perspective.1 1.2 What is R&D?
The phrase ‘Research and Development’ (R&D), according to the Organisation for Economic Cooperation and Development (OECD), refers to ‘creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of knowledge to devise new applications.’2 Broadly, it may be defined as a process involving ‘systematic, investigative and experimental activities’ for resolving scientific or technological uncertainty, or for evolving a novel idea or process, with a view to acquiring new knowledge or creating new or improved materials, products, devices, processes or services, and includes all activities necessary for, and integral, thereto. R&D consists of four types of activities: basic and applied research, and product and process development. • basic research: original experimental work without a specific commercial aim, frequently done by universities; • applied research: original experimental work with a specific aim; • product development: the improvement and extension of existing products; • process development: the creation of new or improved processes.3 R&D outsourcing can be said to be the outsourcing of any or all of the above activities. 1.3 Organisational patterns in R&D outsourcing
It is of paramount importance to choose the appropriate organisational design for the leveraging of intellect. The following are the globally most practised models of R&D outsourcing: • Infinitely flat organisation: involves the flow of intellectual information from the centre to independently operating nodes. • Inverted organisation: involves the flow of intellectual information through two different modes. It occurs informally from node to node, or formally from node to centre. • Starburst organisation: ensures that deep or critical knowledge is retained by the centre, which serves as the knowledge base for the rest of the organisation. Normally, the centre acquires, invests or forms alliances with several companies (nodes) situated across the globe. • Spider’s web or network organisation: ensures that knowledge resides in several knowledge centres scattered across the globe and is required for a limited time and purpose. The intellectual flow happens naturally through clusters or multiple nodes.4 1.4 R&D outsourcing in the pharmaceutical industry
The pharmaceutical industry is a market-driven industry, where the competition is globally contested. It requires every player to strive for a competitive edge over the others in terms of technological superiority, cost reduction, efficiency, etc. The pharmaceutical industry, which showed spectacular growth rates starting in the 1990s, received a setback in 2008 when the global pharmaceutical industry recorded the slowest growth rate (4.8 per cent) of the decade.5 It has been predicted that the slump in the pharmaceutical industry will continue for another five years.6 Therefore, in order to gain access and proximity to growing markets,7 and to combat the adverse situation, pharmaceutical industries are adopting outsourcing (both manufacturing and R&D processes) as a cost-effective method. In recent times the scope of R&D outsourcing has been enlarged. From the modest beginning of being a single-service industry, focusing on preclinical services, it has evolved into a full-service industry, providing numerous services relating to development and manufacture processes. Today, R&D outsourcing, in the context of pharmaceutical industries, involves outsourcing of various processes involved in drug development, which include discovery chemistry, service biology, clinical study design, scale-up manufacturing, medical writing and regulatory submission. 1.5 India as the emerging hub of R&D outsourcing in the pharmaceutical industry
The shift towards outsourcing has opened up new prospects for India. According to the Health & Sciences Practice of Ernst & Young, India is perfectly positioned to be a preferred destination for global pharmaceutical companies to outsource R&D as well as manufacturing. With India offering a significant cost-quality proposition in end-to-end R&D with potential savings of 61 per cent as compared to the US, India could see more global pharma companies adopting different operating models such as captive offshoring, dedicated R&D units in partnership, fee for services and collaboration/joint ventures for future growth within India. 1.6 Outsourcing models prevalent in India: cooperation models for outsourced services
In the areas of pharmaceutical R&D and production, four different cooperation models between pharmaceutical companies as customer and service providers as vendors have been established, depending on goal congruence and measurability of results. There is a simple correlation: the higher the goal congruence, the more trust between the two partners, and the higher the measurability of results, the closer the relationship comes to a traditional customer–supplier relationship. • Project selection. Selection of service providers on a project-by-project basis from a core list of preselected service providers. The service providers are engaged according to the fit of their core competence to the specific project requirements (e.g. the choice of the best-fitting clinical research organisation for the management of clinical trials in a special therapeutic area and/or a special phase of the drug development process). • Price competition. A long list of service providers are systematically put into competition in order to secure the lowest purchasing prices. This model is less strategically oriented, but rather serves to achieve the demand for the most cost-efficient fulfilment (e.g. purchase of standardised analytical services for routine analytical tasks within drug development or quality management). It can be applied successfully only if the outcome can be measured easily. • Strategic partnership. Strategic links with a handful of preferred service providers who are given preferential ‘right of first refusal’. A framework contract covers all the relevant services (e.g. contracts with full-service drug discovery service providers such as Albany Molecular Research). • Joint venture. If the...