US Biotech Firms Plan to Move Clinical Trials, Research to India
March 1, 2004
HYDERABAD: After moving hundreds of thousands of software jobs overseas, American companies are now looking at India to outsource research and clinical trials in biotechnology.
Officials from about a dozen US-based pharmaceutical companies are in India to attend a three-day conference on biotechnology and explore possible tie-ups with Indian companies, which can do research for them at a fraction of what it costs in the United States.
The conference began Thursday at Genome Valley, a sprawling 600-acre complex that is being developed as a biotechnology research hub in the outskirts of the southern city of Hyderabad.
"I am here not to just talk about ideas, but also I am looking for outsourcing opportunities for my company," said Vipin Garg, chief executive of North Carolina-based Tranzyme Pharma, Research and Triangle Park.
The move will help in bringing down the cost of clinical trials of the new drugs in the United States, which currently is estimated at $150 million US per year, said Steve Lawton, vice-president of Biotechnology Industry Organization, a major grouping of biotechnology firms in the United States.
Lawton said he disagreed with the Democrats, who blame U.S. job losses on increasing transfer of technology work by American companies to countries like India and the Philippines.
"Outsourcing does not necessarily means loss of jobs at all. It could mean the creation of more different types of jobs in the US," Lawton said.
He did not elaborate, but outsourcing proponents say the practice will eventually pay off for the country losing jobs by giving its companies the financial might to develop new products and technologies. At the same time, they say, higher employment in developing countries puts more money in the hands of foreign consumers, spurring demand for western products.
Lawton and others at the conference, however, expressed concern over intellectual property rights, saying India's ability to attract foreign investment in biotechnology research will depend on new patent rules scheduled to take effect from in January 2005.
Currently, India does not recognize product patents. Any company in India is free to copy any product if it employs a manufacturing technique different from that used by the product's inventor.
"One of the issues we have to figure out is how do we protect our intellectual property rights while outsourcing," said Garg.
"We hope very much that (the Indian) Parliament over the next year or so will take up these issues, which are somewhat complex but terribly important to the biotechnology industry and essential to significant partnering arrangements between companies in the United States and the companies based here," he said.
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