Wednesday, August 11, 2004

Drug firms in United States, Europe move biotech work to India

BANGALORE, India (AP) - Drug makers in the United States and Europe are increasingly moving clinical trials and research work to India, which helped Indian firms earn US$54 million in revenue in the last fiscal year, a trade body said Wednesday.

"India is being taken seriously as a biotech outsourcing destination,'' said Kiran Mazumdar-Shaw, who heads the Association of Biotech Led Enterprises, a grouping of India's biotechnology firms.

For years, American and European companies have farmed out software development, engineering design and back-office work to firms in India and other countries that have low wages and plenty of skilled workers.

India earns about US$12.5 billion annually from information technology outsourcing and revenues are growing at 30 percent per year. More than half of Fortune 500 firms outsource some part of their work to India.

The practice of passing on jobs in drug development research, analysis of research data and clinical trials to India is a new, but growing trend, Shaw said.

Revenue from work outsourced by Western companies accounted for more than 13 percent of India's biotechnology exports of US$395 million in the year that ended March 31.

Britain's GlaxoSmithKline, German drug maker Bayer, Aventis of France, and U.S.-based Pfizer Inc. are some of the companies that have already begun outsourcing work to India.

Biotechnology is the use of the DNA of living organisms to create better products and manufacture them. Drug firms use the technique to develop medicines and vaccines.

In five years, Indian firms are expected to be earning annual revenues of US$5 billion from outsourcing of biotechnology-related services, Shaw said.

"We see outsourcing in this area growing exponentially over the next few years and giving us the same success that India had in software,'' he said.-AP

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Drug firms in United States, Europe move biotech work to India