| India: Gaining expertise across the healthcare outsourcing sector |
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| Tuesday, 10 April 2007 | |
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GlaxoSmithKline PLC (NYSE: GSK) has recently announced its outsourcing agreement with Tata Consultancy Services (TCS). TCS will offer global clinical research and development program that will include outsourced data management and medical trial reporting services. The deal is valued at £10 million. GSK currently employs about 2,400 people in its R&D operations in India, located at Mumbai and Bangalore. This new deal is expected to create about 100 more jobs. TCS had also signed a similar deal with Novo Nordisk for data management of its clinical trials conducted in India. TCS has over the years consolidated its position as a leading provider of services across the knowledge services domain. The company offers competent services with the best of IT talent available in India. Its outsourcing services have offered clients top quality, making it one of the most favored companies in India. With spiraling costs and increasing demand for new drugs, the R&D units of pharmaceutical companies have found themselves with their back against the wall. They are running out of time, as patents on a number of drugs will expire soon. The development of new molecules is a time consuming and cost intensive process. It is a risky proposition as there is no guarantee that a particular process being followed will eventually lead to success. Industry estimates have put the cost of launching a new molecule commercially at $800 million. According to European Federation of Pharmaceutical Industries and Associations (EFPIA) estimates, out of the 10, 000 molecules that are developed, only a miniscule 1-2 go through the entire spectrum of tests and requirements successfully. Clinical trials are most time consuming in the entire process of developing a molecule. There are various phases involved, which require extensive data collection and management. According to industry experts, companies that are offshoring clinical trials have been able to achieve saving of about 40% in the costs incurred in capturing clinical data. In an effort to speed up the process, companies are offshoring contract research to India, increasingly considering the available talent. Global companies have adopted various routes to tap the resources in India, such as partnership with local companies, contractual outsourcing arrangements and establishing local subsidiaries. These are being used by the companies to outsource either complete research processes or portions of it. The data management ‘back office’ and the solutions offered, aid a pharmaceutical company to facilitate, implement and track the relevant clinical trial activities. Clinical data management comprises data capture (from diverse test reports over a period of time), data cleaning, evaluation, validation, and then entering it into applications. They assist in effective and efficient mapping of the process by enabling faster designing and prototyping of trials, by allowing facilities such as data schema and checking. With a standardized data collection process, the speed and accuracy improve. Other benefits include, ability to exchange data over the web, generation of consistent reports, online adverse event reporting. All of these collectively lead to effective data management and analysis. Clinical trial management solution collects and centralizes data for easier access, greater visibility, and more efficient processing. While clinical trials in India are challenged by a number of issues such as improper facilities and intellectual property concerns. Other softer issues such as opposition to Indians being treated as guinea pigs and not being informed that they are actually a part of study, or that the drugs being used to treat them is new, etc. have also led to the outsourcing process being slightly slow to take off. The companies are however very eager to set up clinical trials and other R&D processes in India, as the country offers a diverse mix of patients, in terms of race, lifestyle, economic conditions and hereditary characters. Considering this, it is very important that India addresses all the issues related to the clinical trials. Companies will be able to command better rates when they are able to offer the entire spectrum of services from conducting trials to actually analyzing the results. ValueNotes Outsourcing Watch: Insights for Investors is a unique news and analysis service from the ValueNotes Outsourcing Practice, focused entirely on outsourcing; This weekly publication analyses events in outsourcing, outsourcing companies, trends in the sector, impact of global competition from offshoring to established US companies, and emerging investment opportunities. No responsibility is accepted for errors of fact or opinion. Neither the analyst nor ValueNotes has a position in the stocks covered above, or has received any payment in any form for this report. ValueNotes does not own or trade in the stocks of companies under coverage. ValueNotes does not provide investment banking services or investor relations' services to preserve the independence of its research. Neither ValueNotes nor the analyst incurs any liability arising out of use of the above information/ report. Reproduction in whole or in part without written permission is prohibited. ValueNotes Outsourcing Watch articles are distributed through FinancialWire, an independent, proprietary news service of Investrend Information, www.investrend.com Related Items: |
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