Contract R&D grows with drug development

MUMBAI: The focus on new drug development by pharmaceutical firms is leading to a boom in contract research.
While big companies like Dr Reddy’s, Ranbaxy, Cipla, and Nicholas Piramal stand to gain with their separate units, smaller pharma firms and testing labs too are pinning their hopes on the growing contract research business.
‘‘In India, clinical trial is a $150-200 million market.With clinical trial activity cheaper by 30 per cent here than in the West, India provides the opportunity to recruit faster and retain better,’’ said an official with Quintiles, a $1.5 billion clinical research organisation (CRO) which started drug trials in India in the late 1990s.
CROs developing new drugs is turning out to be the next money spinning industry. By 2010, India will get 20 per cent of the global CRO revenue, around Rs 50,000 crore. The CRO industry, which notched up revenues of Rs 550 crore in 2003, is estimated to be growing at almost 100 per cent.
Off late, there has been a lot of action on the CRO front. While Quintiles has ramped up production, Nicholas Piramal is expanding the capacity of its CRO, WellQuest. Lotus Labs and Vimta Lamda, which started of as small ventures conducting bio-equivalence studies, have also got into clinical studies for MNC drug firms. Bangalore-based Lotus Labs is catering to the domestic sector, too, as M A Karthikeya points out, ‘‘Indian pharma firms are aggressively introducing new generics in foreign markets, which require extensive clinical studies.’’
He said decision to follow WTO norms will spur the CRO industry.
Clinical testing laboratory SRL Ranbaxy has also embarked on two clinical trial projects for Atlanta Pharma, a US-based CRO and European pharma company. The firm has already undertaken contract clinical trials for Pfizer, Eli Lilly and Johnson and Johnson, besides domestic companies such as Wockhardt and Ranbaxy.
Industry sources said that two thirds of the total global R&D cost of $40 billion is invested in drug development. Outsourcing of clinical and pre-clinical research accounts for nearly $13 billion. Of this, about $9 billion is allocated for contractual research.