Vendor Voice

India is the 'destination'

Anil Bhasin talks about networking technology that will help hasten Indian pharma industry's growth as the perfect offshoring hub

Growing at a rate of eight to nine percent per year, the pharmaceutical industry in India is pegged to reach $48 billion by 2007, according to a CII study. This growth has led the players in the Indian pharmaceutical industry to explore newer avenues of drug research, discovery and development, promising higher capital investments in the near future. Also, many multinational companies have entered India to market drugs and conduct clinical trials and research. Thus, Indian pharmaceutical research, manufacturing, and outsourcing have received an impetus, creating the image of a land of opportunities in pharmaceuticals. The same CII study also predicts that India could become a global pharma hub by exporting domestically produced generic products and presenting itself as an off-shoring destination for clinical and pre-clinical research and other support services. In addition, there is tremendous potential presented in the Indian pharma market itself. Consumer spending on healthcare went up from four percent of GDP in 1995 to seven percent in 2007. That number is expected to go up to 13 percent of GDP by 2015. According to a recent McKinsey report, that will turn India into a $20 billion pharma market.

In particular, India is poised to emerge as a key contract research hub. According to a study by Ernst & Young, the total market for clinical research activities in India is expected to touch $1.5-2 billion by 2010. A T Kearney has listed India second (just after China) for attractiveness as clinical trials centers. With pharma majors facing increased pressure on profit margins, spiraling R&D costs and increasing overheads, outsourcing of clinical research processes to third parties in developing countries seems a viable option. By contracting such work to India, they save from 40-60 percent in new drug development.

Long distance

This implies that pharma companies will have a huge R&D, sales and marketing network spread across geographies; and their telecommunication costs can grow exponentially. Therefore, pharma companies need to embrace technology that can offer dynamic lines of communication between global markets and its manufacturing and research centres in India. Ultimately, Indian's growth as a global player hinges on its ability to overcome challenges. Give the current scenario, integrating and facilitating cost-effective communication is a major challenge.

Networking and communications technology is considered the enabler for many aspects of the contract research and clinical trial business. The application of technology has the potential to vastly improve:

• Time to market, which is achieved through significant reductions in patient recruitment intervals and more efficient data management
• Cost containment is achieved through reduced re-work required for one trial and internal savings on systems development
• Improved productivity is achieved by re-use of standard network, study sites and processes across multiple trials that will release key staff quicker
• Faster and better informed decisions can be made by implementing web-based real-time data access for rapid decision-making and project management reporting

Harnessing technology

Here are some specific challenges that plague the Indian pharma industry:

• The "silo effect" in large pharmaceutical companies that prevents clinicians from sharing pertinent data
• Lack of standardised data definitions, necessitating duplicate testing and trials
• Weak process and systems integration that slows time to market

Internet based communication platforms could help pharma companies overcome the above by developing a fully electronic clinical development system through Internet based initiatives. The edge that they provide include:

Secure extranets for research partners

In the ideal networked pharmaceutical business model, each company keeps in-house only the intellectual capital that is critical to its competitive advantage. The remainder is outsourced in the form of strategic alliances with peers and vendors, both temporary and long-term, domestic and international. Using teleconferences, web-based collaboration tools, and encrypted e-mails, companies can remain in constant contact with virtual partners and sub-ordinate teams for each clinical trial project.

R&D supply-chain management

Supply chain is a term not often associated with information, but pharmaceutical companies handle large data transactions when mapping to gene bank data, or when gathering genotype data from customers. Supply-chain standards allow sharing of critical systems while protecting intellectual property.

E-learning

The learning curve is steep and collaborative work can be supported and enhanced through secure networks providing e-mail, IP telephony, and video conferencing for on-demand e-learning and informal knowledge sharing.

Online project setup

In clinical trials, establishing the protocol and study design constitutes most of the work. Internet-based automated application builders can help clinicians design procedures, capture data, and establish workflow rules.

Clinical portals

Pharmaceutical companies can extend their reach beyond partners with online multimedia environments that speed clinical trial data transactions and exchange with regulatory agencies and non-secure partners.

R&D command centers

Virtual project teams are using a model that provides administrators and clinicians with latest tools and applications for managing the entire clinical R&D life cycle. Command centers, which can be hosted or built in-house, can handle multiple data; and information feeds from extranets, intranets, and portals. This allows a rapid response to unexpected regulatory or clinical problems and also quick redeployment of intellectual property to new projects.

Communication trends in pharma sector

International trends predict that internal and external communication in pharma companies will change immensely as companies focus on this area to improve delivery capabilities and overcome the so called "silos" effect. As indicated by the findings of the Economist Intelligence Unit-Foresight 2020 study, "In the next 15 years, healthcare and pharma executives expect to see more collaborative problem solving within their firms facilitated by technology and will also be using automate simple processes and services. Most (82 percent respondents from pharma and healthcare industry) expect to involve customers more closely in the development of offerings and they expect customers to place higher value on personal attention than on price (79 percent)."

Indian pharma companies will have to adopt these communication trends as they expand their presence globally. Entering the need for solutions that enable pharma companies keep employees, partners, suppliers and customers well-trained and informed in a high impact, cost efficient manner, no matter where they are located. These solutions will enable live and on-demand communication of high bandwidth, rich media to the desktop, using standard web browsers and media players. To get a perspective on its cost-effectiveness consider this-online learning and communication with content networking is typically ten times less expensive than traditional classroom training carried out by pharma companies. Since drug development and other activities are highly confidential, security is always an area of concern for them.

IT in pharma landscape

The Indian pharmaceutical sector is highly fragmented with more than 20,000 registered units. It has increased its footprint dramatically in the last two decades. The 250 leading pharmaceutical companies control 70 percent of the market with the market leader holding nearly seven percent of the market share. Furthermore, it is an extremely fragmented market with severe price competition and government price control by bodies like National Pharmaceutical Pricing Authority (NPPA). Prior to the product regime, there was a stiff price war amongst companies focusing on reverse engineering of complex molecules at lower costs and manufacturing me-too products with same therapeutic properties. Now, Indian pharma companies are focusing on honing their R&D capabilities that were somewhat ignored during the process patent era. This renewed focus on R&D re-iterates the need for robust and secure networks for large data transactions. Small and medium sized Indian pharmacos are still not convinced about the long-term benefits of adopting cutting-edge technology due to budget and infrastructure constraints. Although, the SME pharma market is very large and has tremendous potential, it is yet to be tapped to its full potential. Many Indian SME pharma companies are not into drug research and testing. Still, they need technology to improve efficiency in quality assurance and control, and for adherence to regulatory requirements for operation and testing, improving batch tracking and expiry date tracking, optimising credit and logistics control, consolidating sales promotions, discounts, and purchase-sales-inventory analysis and optimally tracking consignment sales.

Pharmacos and Internet economy

The Internet economy is also rapidly changing the face of the industry and delivering new web-enabled solutions to solve business and care issues such as billing and purchasing, increasing sales, marketing and R&D productivity, and reducing operating costs across the organisation. Higher R&D efficiency via web enabled clinical trial processes and increased information sharing will have a key impact by shortening pharmaceutical R&D cycles. Emerging sciences such as genomics and proteomics will increase the number of drug targets from many hundreds to tens of thousands, therefore Internet applications will help optimise huge volumes of complex data and will better identify drug candidates. Pharmacos have to make the Internet work for their business, by going from a traditional pharmaceutical organisation to an e-business with web-enabled applications. This calls for a rethinking of existing business models. It involves becoming more connected, and more flexible to react faster to change.

The question is no longer when the Internet or technology will impact the business of pharmaceuticals, but how the industry will adopt technology to get the most out of this new global business environment. Today's new pharma companies need scalable networking solutions that will grow with the company, provide productivity for mobile employees, and meet security regulations required in the business.

A recurrent theme across the pharma sector is the sheer volume of data that needs to be analysed, assessed, and used strategically, in real time, or as near as possible. The mapping of the human genome provides a powerful example of how analysing data faster can affect the competitive nature of a business. Two institutions—one private, one public—were competing to publish the exact sequence. The stakes in this exercise were very high; if the private company were able to complete the mapping first they could patent and copyright the genome sequence, and make royalties estimated to be worth between $600 and $700 million per year. For the public institution, the status accrued by publishing the sequence first, and making the genome mapping publicly available and royalty-free for future drug development, were primary motivations. In the end, the public institution was able to reconfigure its high-performance compute clusters and narrowly beat the competition in mapping the human genome.

(The writer is the VP-Enterprise of Cisco India & SAARC)