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Outsourcing
Indian outsourcing sector eyes U.S. medical, drug industries

By M. Chooki

The Indian outsourcing sector is claiming what The New York Times described “as a crown jewel of corporate America” –– the medical and drug industries.

The paper cited the example of Dr. Bala S. Manian, who, it said, rarely looked back when he left India to attend graduate school in the United States.

“Since 1979, he has started one medical technology company after another in Silicon Valley. But Dr. Manian is now rediscovering his native country. His newest medical venture, ReaMetrix, which makes test kits for pharmaceutical research, is still based in Silicon Valley. But 20 of its 28 employees are in India, where costs for everything from labor to rent are lower,” the paper said.

For an industry that is viewed as an economic growth engine the flight of jobs is considered worrisome. As in the IT sector, the rationale behind the outsourcing of medical jobs to India is purely economic.

Dr. Manian said unlike in the U.S., where a million dollars would not last more than three months, in India he could run a group of 20 for a year and half on that amount.

The outsourcing of some life sciences jobs could be seen as evidence that American biotechnology companies, like their counterparts in other industries, are doing nothing more than building global connections that help make them more competitive around the world.

Although the job movement still small it represents a trend, according to industry experts. A chemist in India makes $20,000 to $40,000 a year compared to $80,000 to $100,000 in the U.S.

The paper said clinical trials of new drugs are already moving to countries in Asia, Eastern Europe and Latin America because the costs of conducting the trials are lower and human subjects can be recruited more easily.

Even drug manufacturing is likely to move to India which has a thriving generic drug manufacturing sector and is moving into biotechnology.

The paper cited the example of the Indian company Biocon, which went public. Its founder and chief executive, Kiran Mazumdar-Shaw, has been described in the news media as the richest woman in India.

With revenues of more than $100 million last year, Biocon is a leading producer of generic cholesterol-lowering drugs called statins. The company plans to a major producer of insulin and monoclonal antibodies. It also has divisions that do contract research and run clinical trials for large American and European pharmaceutical companies.



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