Pharma Outsourcing Emerges as Leader in Healthcare BPO Sector in India

Healthcare outsourcing is turning out to be a major avenue of business for the Indian BPO industry. The increasing demand in healthcare outsourcing is creating the environment for favourable and stable growth in the BPO sector.

Pharma Outsourcing. Image source

Growing demand for Indian BPO companies

Indian BPO companies are emerging as the preferred choice for outsourcing jobs. In fact, India has climbed up to be the second preferred destination for the global healthcare outsourcing industry, with USA leading at the top. This progress of the Indian BPO sector is due to various contributing factors such as the increasing global health care costs, low or limited availability of manpower, absence of quality vendors, etc.

Global companies have started to realise the potential of India in the pharma outsourcing destination as it has a low cost base and huge talent pool. This has fuelled the demand for the Indian BPO companies.

Main verticals of the healthcare BPO sector

The health care or pharma outsourcing sector can be divided into three major divisions- pharmaceutical, payer, and provider.

  • Pharmaceuticals: These companies prefer to outsource their functions and processes in order to continue to maintain their hold on the competitive business. The pharmaceutical outsourcing market is segmented into contract research outsourcing (CRO), contract manufacturing outsourcing (CMO) and business support functions.
  • Payers: These companies are involved in the health care insurance business. As more and more people opt for health plans, the work pressure on insurance companies continues to increase. The Indian BPO industry provides support to the insurance companies to deal with this scenario by streamlining various functions and reducing their operational costs.
  • Providers: These are the hospitals and clinics that outsource non-core functions. Their aim is to enhance the revenue cycle performance and improve cash flow.

Position of pharmaceutical outsourcing in Indian MPO (Market Process Outsourcing) market

The Indian MPO segment is currently estimated at 3.3-4.2 billion dollars. The pharmaceutical or pharma outsourcing market accounts for about 75 per cent of it and that does not include the contract manufacturing services. This means the pharmaceutical outsourcing market stands at 2.5-3.1 billion dollars. This data is as per a new Assocham-EY joint study.

The report further states that the payer outsourcing market comprises of 700-900 million dollars of India’s MPO market while the remaining 100-200 million dollars is accounted for by the provider.

Emerging trend in the Indian healthcare BPO industry

The Indian MPO sector is expected to receive a boost in the coming years. There are several domestic companies that are providing quality services while keeping a tab on their cost competitiveness.

Besides, the payer BPO sector is predicted to achieve 10 per cent growth year-on-year at the global level in the next couple of years. Even the provider outsourcing is expected to grow at 30 per cent or more during the next three or four years. These apart, the contract research organizations (CROs) market is likely to grow at 18-20 per cent in the next few years.

Suggestions for further growth in the Indian MPO sector

In order to bring about an expansion in the growth of the Indian MPO sector the government must take some concrete measures. As per the Assocham-EY study, the government needs to take steps for proper implementation of data privacy laws.

There must be suitable regulations regarding patent laws and intellectual property. The government must lay stress on education. All such factors will contribute to the growth of the MPO sector in India.


As the pharmaceutical outsourcing market continues to grow as the key player of the Indian medical process outsourcing (MPO), it seems likely that this upward trend will continue for at least the next couple of years to follow.

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