The Hindu : Business : Pharma sector begins tapping BPO segment

Online edition of India's National Newspaper
Sunday, Dec 05, 2004

Business

Business

Pharma sector begins tapping BPO segment

By Indrani Dutta

KOLKATA, DEC. 4. The Indian pharmaceutical industry is all set to take a leaf out of the books of the IT industry emerging as a BPO (Business Process Outsourcing) hub.

Some companies have already begun tapping the outsourcing market estimated at $10 billion annually in generic drugs. "This is set to become a big opportunity like the IT industry by 2010,'' Pankaj Patel, Chairman and Managing Director of Zydus Cadila, said.

Talking to The Hindu, he said several drug majors such as Ranbaxy Laboratories and Dr. Reddy's Laboratories along with Zydus had already started acting as a source for overseas pharma companies. Zydus was billed as the fourth largest pharmaceutical company in India after Ranbaxy, Cipla and Glaxo.

Mr. Patel said, "India had definite advantages in manufacturing generic formulation. These included good customer service, lower costs and regulatory knowhow.''

Abundant opportunities

"With about $50 billion worth of molecules going off-patent over the next few years and abundant opportunities to market formulation generics, active pharma ingredients and intermediates, Indian pharma companies are now westward bound,'' Mr. Patel said.

Indicating that India was in a position to capture about 30 per cent of the pharma BPO market, Mr. Patel said while China was the main competitor, East European countries, Brazil and Mexico had also emerged as good sources.

At a press conference, he said that Zydus was looking at acquisition of overseas distribution companies for marketing its generic formulations. The pharma major was in the process of identifying companies in Spain and Italy, he said. Operations at a similar outfit acquired in the U.S. a year ago were expected to start now. Zydus also had a presence in France through its acquisition of Alpharma France in 2003 which had 90 generic registrations. "This gave Zydus Cadila the right base to enter the European generic market,'' Mr. Patel remarked.

Zydus, which exported drugs worth Rs 250 crores in 2003-04 expects a Rs 100 crore increase this fiscal and targets a 40 per cent share for exports (in the total turnover) by 2007-08.

Collaborations

Apart from product and marketing alliances Zydus, which acquired German Remedies Ltd in 2001, has entered into collaborations with various domestic and overseas companies.

It has a JV with Sarabhai Enterpises in the animal heathcare segement, a tie-up with Pantheco of Denmark for collaborative research in antibacterials and a pact with the U.S.-based Oncova for joint research on oncogenomics. The company, which is based in Ahmedabad, has units in Mumbai, Patalganga, Ankleswar, Goa and Himachal Pradesh.

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