Pharma Outsourcing Market of India: An Overview

India has established itself as a global destination for pharma outsourcing. The pharmaceutical outsourcing market in India has emerged from being a promising segment to a major player in the concerned industry. This multi-billion dollar industry is fuelling the growth of the BPM sector in India.

Pharma Outsourcing. Image source

Current value of the pharma outsourcing market in India

The pharmaceutical outsourcing market (excluding contract manufacturing services) in India is currently valued at USD 2.5-3.1 billion. It accounts for almost 75% of the medical process outsourcing (MPO) segment in India.

As per a recent study conducted by the Associated Chambers of Commerce and Industry of India (Assocham) and global professional services organisation Ernst & Young, the MPO segment in India is estimated to be USD 3.3-4.2 billion.

The payer outsourcing market in the MPO segment in India is valued at USD 700-900 million. The remaining share of USD 100-200 million is the value of the provider market in the MPO segment in India.

Benefits of pharma outsourcing to India

The pharmaceutical research and development is an expensive field. The pharmaceutical industry has to deal with the increasing expenditure involved in research and development, drug discovery, complex review processes, hiring of competent professionals and various other costs. Outsourcing pharmaceutical research to India can be beneficial due to a number of factors. Some of the benefits of pharma outsourcing to India are:

  • India possesses a large number of US Food & Drug Administration (FDA) approved drug manufacturing facilities
  • India has a huge number of pharmaceutical companies that can provide contract manufacturing facilities to foreign pharmaceutical companies
  • India possesses a number of Contract Research service providers with latest infrastructure and trained staff to carry out clinical development activities
  • There is availability of educated and competent workforce
  • India has qualified bioinformatics scientists
  • Operational expenses are low in India

All these factors make India a lucrative choice for pharma outsourcing.

Potential of pharma outsourcing market in India

The pharma outsourcing market in India is set to grow even bigger than its current state. Domestic players in this market are steadily moving up the value chain in terms of proving service while at the same time maintaining their cost competitiveness. The Indian payer BPO market is expected to achieve a growth of 10% year-on-year for the next couple of years. The provider outsourcing market is also expected to show a positive increase in growth ratio. It is predicted that the CRO market will continue to grow at the rate of 18-20% in the coming years.

The domestic demand for medical process outsourcing is also on the rise. The growing demand for high-end healthcare facilities and hospitals is causing positive growth of the healthcare sector in India. All these indicate that the potential of the pharma outsourcing industry in India is quite bright.

Challenges of pharma outsourcing market in India

Though the pharma outsourcing market in India is on a growing spree, it is still facing some challenges. The major challenges faced by this sector include the lack of data privacy laws, lack of regulations related to intellectual property and patent laws, changing clinical trial laws, etc.

The government must take a firm call on implementing data privacy laws, introducing proper regulations around intellectual property and patent laws, etc. to safeguard the interest of the pharma outsourcing market and contribute towards its further growth.

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