Pharma outsourcing continues to grow, gives birth to new KPO segment

The global economic slowdown continues to have a direct impact on the outsourcing industry, with contracts decreasing by the day but at the same time brings new opportunities for more offshore services. Outsourcing companies continue to deliver services that benefit these companies and have found a way to increase their margins through clinical data management.

In an interview with the Economic Times, chairman of Piramal Healthcare Ajay Piramal believes that pharmaceutical outsourcing is a growing business. “Although it may not turn out to be as big as in IT, outsourcing in the pharma sector is a growing business. However, the lead time in pharma is longer than in IT. Unlike in IT, the process to get regulations is longer and it takes time to shift manufacturing to another location. The low cost advantage will remain. Technology costs in manufacturing are also low and so the gain will come there. Yields will be better,” says Piramal.

Global pharmaceutical firms are leveraging IT spending to cut costs, but Indian IT firms such as TCS BPO, Satyam BPO and the BPO divisions of Accenture and Cognizant are taking their chances on clinical data management in these uncertain times.

According to Debashis Ghosh, TCS Vice President and Global Head for Life Sciences and Healthcare ISU, “Increasing costs of R&D, coupled with low productivity and poor bottom lines, have forced major pharma companies worldwide to outsource part of their data management activities to low-cost countries, thereby saving costs and time in the process.”

This new business segment is called “life science process outsourcing”. “A fairly new but rapidly growing segment of Knowledge Process Outsourcing (KPO) where apart from technologists, we are inducting doctors, pharmacists and even nurses who bring understanding of medicare processes and help in extending services,” reports the BPO Tiger.

Life science process outsourcing has a huge potential for outsourcing firms, as consultancy firm McKinsey & Co. estimates that by 2010 global pharmaceutical companies would be spending about $1-$1.5 billion on clinical trial. Clinical data management is part of the process that brings new drugs to the market. It is part of the clinical trial process which involves data collection from patients, data analysis, validation, and clinical interpretations.

Aside from pharmaceutical outsourcing, Verizon Business senior consultant August Jackson believes that “Medical tourism and online prescriptions are two options that lead me to believe that outsourcing and globalization will eat at the edges of even the medical field. We’ll all be better off for it in the end.”

The continuous growth of the healthcare and pharmaceutical industries has opened another window of opportunity to nurses, as BPO firms entice them into the outsourcing world to handle healthcare and pharma-related services. The Philippines face the same scenario as Filipino nurses opt to work as call center agents or as medical transcriptionists.

Author: Kim G.