Comparison Of Pharma Outsourcing Between China And India

中－印医药 中－印医药外包比较 外包比较 附两国前50强 国前 强公司介 公司介绍

Comparison of Pharma Outsourcing between China and India − With Company Profiles of Top 50 Best Outsourcing Service Providers in Each Country

By Jim J. Zhang, Ph.D. July, 2009

About Author Jim J. Zhang, Ph. D. Jim J. Zhang currently is president and managing director of JZMed, Inc., a US-based, full scale pharmaceutical service company specializing in outsourcing to China. Before founding the company, Jim worked for nine years with Albany Molecular Research, Inc. (AMRI), a US-based and currently one of the world largest CROs. During his tenure at AMRI Jim was responsible for managing and overseeing multiple drug R&D projects that involved the international cooperation of AMRI’s multiple sites (USA, Singapore and Hungary). He played key roles in helping numerous pharma and biotech companies discover and develop a series of drug candidates that later entered preclinical and clinical development including advanced clinical trials. He was also the key contributor to the development of chemical production process for several developmental drugs. Prior to pursuing his Ph.D. program in the US, Jim worked for six years in a China-based CMO as process engineer and developed production process for a number of pharma products. In nearly twenty years practice Jim developed his expertise in chemical process research and development and in the therapeutic areas of viral infection, cancer, chronic obstructive pulmonary disease (COPD), and cystic fibrosis. Currently he holds 18 patents. He is also the principal author of 12 peer-reviewed research articles. Jim has authored a series of industry reports about China pharmaceutical outsourcing. He was also invited by a number of market research firms to author/co-author industry reports. Jim received his master’s degree in Chemical Engineering from East China University of Science & Technology (Shanghai), and his Ph.D. degree in Synthetic Organic Chemistry from the University of Iowa. He also received additional trainings in Medicinal Chemistry through working at Research Triangle Institute (Research Triangle Park, North Carolina).

Report Description It has been well recognized that the global pharmaceutical industry is facing a number of challenges at present. The difficulties the industry is experiencing have forced all drug companies to change their current operation models. They are now forced to pursue more efficient, cost-effective and productive ways to conduct their operations, whether in R&D or manufacturing. The keys for them to make a quick turnaround are to get drug discovered quicker, developed faster, manufactured cheaper and marketed wider. Outsourcing has been proven to be one of the effective solutions for drug companies to quickly turn the situation around as it provides them with the desired efficiency, flexibility and agility. Among all emerging countries for outsourcing, China and India have risen rapidly and become stars in the global pharmaceutical outsourcing arena as both countries possess the unique combination of low cost and quality service. The current global financial crisis has also greatly enhanced the importance of these two countries to many drug companies around the world who are vigorously seeking cost reduction. However, China and India each also possess their own, unique features and characteristics, not only in the pharmaceutical-related industries but also in almost every aspect of social structure. To many companies who are interested in conducting outsourcing or investment in either country, it is always a challenge to decide which country best fits their investment goals. The report, “Comparison of Pharma Outsourcing between China and India”, has conducted so far the most complete and comprehensive comparisons between China and India. It first time revealed the similarities and differences between these two countries in a broad rang of areas. It also revealed the advantages and disadvantages of each country in pharmaceutical outsourcing and the strengths and shortcomings of their service capabilities. Besides, the report also made in-depth comparisons of pharmaceutical and biotechnology industries between China and India including their R&D capabilities of innovative medicines. The report provides a clear insight into the current development states of pharmaceutical outsourcing industries in each country including their market sizes and service capabilities in each technical area. In addition, it provides valuable advices to pharmaceutical and biotech companies who are interested in outsourcing to either country of how to appropriately evaluate each country and decide which one best fits their development goals and outsourcing strategies. The report is a must-read book to all professionals in the industries of pharmaceutical, biotechnology, financial investment and outsourcing service that are interested in either one of these two countries. It is also a valuable reference book to drug regulatory agencies and other government agencies that are involved in strategic planning for development of pharmaceutical industry in their own countries.

Key Findings of the Report
In many aspects China and India are very similar. Both are located in Asia and the most populated countries in the world. Both are still developing countries with low wages for most workers in most industries. However, there are also significant differences between these two countries in the areas related to pharmaceutical industry. Each country possesses its own features and characteristics.
In general, China is better equipped in industry infrastructure than India. Chinese pharmaceutical market is also much bigger than India’s. However, the business operation style and philosophy in Indian companies are closer to the Westerner than in Chinese companies. Indian companies are also more familiar with the Western regulations than Chinese companies. They also have broader global presences than Chinese companies.
China is better in education of biology than India. The biotechnology industry in China is also more advanced than in India. However, Indian pharmaceutical companies have invested more in R&D and have a much broader product scope than Chinese companies.
In traditional pharmaceutical sector, Chinese companies are still limited to manufacturing of traditional products which are marketed in the limited number of countries. But, in the biotech sector, Chinese companies possess much stronger capabilities in R&D and manufacturing of macro compounds than Indian companies.
In professional outsourcing service, the two countries provide close service scopes and possess close service capabilities. However, there are still differences in each service sector between these two countries. In discovery service, Chinese companies and Indian companies possess close skills and offer similar services and qualities. However, in target identification and validation as well as those related areas such as research in genomics and proteomics, Chinese companies possess stronger service capabilities than Indian companies; whereas in small molecule drug R&D, Indian companies are more capable than Chinese companies.
In preclinical research service, Chinese CROs possess better service capabilities than Indian CROs; whereas in clinical research service, it is just opposite. In process R&D and scale-up synthesis, both countries possess similar capabilities. However, Indian companies possess better skills and capabilities than Chinese companies in formulation, manufacturing and marketing of generic drugs.
Major pharma and biotech companies play different strategies in these two countries. In India, they more tend to form close collaborations such as risk-sharing outsourcing with an Indian company to co-develop drug candidates, but very few of them are willing to permanently set up a decent size of R&D center or manufacturing facility in the country. In stark contrast, almost all major pharma and biotech companies

have invested hundreds of millions of dollars in China to establish their whollyowned R&D centers and large scale manufacturing and marketing facilities. Many of their China R&D centers have already reached decent sizes and gained strong capabilities. They are ready to conduct full-scale research independently.
The outsourcing models between the Western companies and the Asian companies are also not limited to just straight outsourcing. Rather, it has extended to including all types of activities such as product marketing and drug candidate licensing. Also, the interesting outsourcing service providers are not just limited to those professional ones. Any pharma or biotech companies in any of these two countries could become outsourcing partners as long as they possess the desired capabilities.
The pharma outsourcing industries in both countries have grown rapidly in the recent few years. They are currently valued at about $1.42 B in China and $1.77 B in India, respectively; each occupying only about 2% share in the global pharma outsourcing market. On the other hand, both markets are posed to still grow rapidly in the future as they are driven by a number of positive factors. However, China appears to have higher future growth potential than India as it has fewer growth resistors. It will very likely catch and even surpass India after 2010.
At present, India is better than China in small molecule drug R&D and manufacturing. But China is superior over India in biotechnologies including the R&D and manufacturing of macro compounds. India offers better product quality but China has more cost reduction advantage. In terms of investment opportunities, China seems to present more attractions than India as its industry infrastructure and biotechnologies are more advanced.

Methodologies the Report Employed The report is written based on the in-depth investigations and studies of pharmaceutical outsourcing industries in both China and India. It first carefully selected, among a large pool of companies, top 50 best outsourcing service providers in each country. It then conducted detailed comparisons among these selected companies in more than twenty different areas. The comparison is performed in four different ways:  Head-to-head comparison of two countries including advantages and disadvantages of each country in pharmaceutical outsourcing;  Head-to-head comparison of pharmaceutical outsourcing industries between the two countries including their development history and pattern, current market sizes and service capabilities, strengths and shortcomings, and future growth potentials including the growth drivers and resistors;  Head-to-head comparison of top outsourcing service providers of each country;

 Head-to-head comparison of popular outsourcing models in each country. The objective of the comparison is to provide readers an unbiased depiction of the pharmaceutical outsourcing industry in each country with the emphases on revealing each country’s strengths, weakness, advantages and disadvantages in outsourcing.

Your Questions Are Answered The report provides detailed answers to a variety of questions every outsourcing and investment company is concerned about:


What are the most concerned issues when drug companies choose an outsourcing destination? How to compare one country with another in pharma outsourcing?
What advantages and disadvantages do China and India each possess? What are India’s strengths in pharma-related industries? Does China have its own features?
Why China not India is better suitable for some projects? Why India not China better fits other projects? What are the most popular outsourcing models in each country?
What types of services do China and India each provide? Which country is better in what areas? How about the differences in service capabilities both in general and in each specific technical area?
Who are those top players in each country? What are their current service capabilities? Who are the best players in each service sector of each country?
What are the cost structures in each country? Which country provides more costreduction?
What are the current market sizes of pharma outsourcing industries in China and India? How about the market sizes of each service sector? Where do they stand in the same sector of the global industry?
Which country will have more potential for future growth? What are drivers and resistors of their future growths?

Table of Contents

Scope of the Report About Author Executive Summary ♦ China and India: The two most favored places for pharma outsourcing ♦ Advantages and disadvantages of China and India in pharma outsourcing: Head-to-head comparison of two countries ♦ Strengths and shortcomings of China and India in pharma outsourcing: Head-to-head comparison of top 50 best service providers of each country ♦ Which country best fits your outsourcing investment? – A series of case studies Chapter 1. China and India: The Two Most Favored Places for Pharma Outsourcing Summary 1.1 Introduction 1.1.1 World pharmaceutical industry is currently experiencing downturn and outsourcing is one of the effective solutions to quickly turn it around 1.1.2 Center of pharma outsourcing industry has shifted to the East 1.1.3 Emerging of China and India as favored places for outsourcing 1. Emerging of Chinese pharma outsourcing industry 2. Emerging of Indian pharma outsourcing industry 1.2 Fast development of pharma outsourcing industries in China and India 1.2.1 Development patterns of pharma outsourcing industry in China and India 1. Development pattern of Chinese pharma outsourcing industry 2. Development pattern of Indian pharma outsourcing industry 1.2.2 Market development of pharma outsourcing in China and India 1. Market development of pharma outsourcing in China a. Market development history and current market sizes of Chinese pharma outsourcing b. Current market sizes of each service sector 2. Market development of pharma outsourcing in India a. Market development history and current market sizes of Indian pharma outsourcing b. Current market sizes of each service sector 3. How to compare with global pharma outsourcing markets a. Current total market sizes of global pharma outsourcing industry b. Current global market sizes of each service sector and their distributions 1.3 Growing importance of China and India to world pharma industry 1.4 Summary of current development trend of global pharma outsourcing industry

Chapter 2. Advantages and Disadvantages of China and India in Pharma Outsourcing: Head-to-Head Comparison of Two Countries Summary 2.1 Introduction 2.2 General comparisons between China and India 2.2.1 Comparison of higher education systems between China and India 2.2.2 Comparison of workforce structure in pharmaceutical industry 2.2.3 Comparison of labor and raw material costs in pharmaceutical industry 2.2.4 Comparison of general industry infrastructure 2.2.5 Comparison of business philosophy 2.3 Comparison of intellectual property (IP) protection environment between China and India 2.4 Comparison of pharmaceutical industries between China and India 2.4.1 Comparison of development history of pharmaceutical industries in China and India 2.4.2 Comparison of pharmaceutical markets between China and India 1. Chinese pharmaceutical market sizes 2. Indian pharmaceutical market sizes 2.4.3 Comparison of general capabilities of pharmaceutical industry between China and India 1. Chinese pharmaceutical industry 2. Indian pharmaceutical industry 2.4.4 Comparison of drug R&D capabilities between China and India 2.5 Comparison of biotech industries between China and India 2.5.1 Chinese biotech industry 2.5.2 Indian biotech industry 2.6 Conclusions Chapter 3. Strengths and Shortcomings of China and India in Pharma Outsourcing: Head-to-Head Comparison of Top 50 Best Service Providers of Each Country Summary 3.1 Introduction 3.2 Comparison of overall service capabilities of pharma outsourcing in China and India 3.2.1 Overall service capability of Chinese pharma outsourcing industry 3.2.2 Overall service capability of Indian pharma outsourcing industry 3.3 Head-to-head comparison of top 50 best outsourcing service providers in each country 3.3.1 Selection of top 50 best service providers in each country 3.3.2 Criteria for selection of top 50 best service providers in each country 1. Selection criteria 2. Classification and definition of CRO/CMO service capabilities

3. Classification of players and their ratings 4. Selection 3.3.3 Head-to-head comparisons of selected top 50 best players in each country 1. Comparison of service provider distributions 2. Comparison of professional service providers in each service sector 3. Comparison of service capabilities between Chinese companies and Indian companies 4. Comparison of current states of internal drug R&D programs and capabilities between Chinese companies and Indian companies 5. Comparison of service capabilities in biopharmaceutical manufacturing 6. Comparison of global presences of Chinese companies and Indian companies 7. Summary of head-to-head comparisons 3.4 Case studies: Head-to-head comparisons of typical Chinese companies with typical Indian companies 3.4.1 Comparison between a Chinese CRO and an Indian CRO 3.4.2 Comparison between a major Chinese pharma company and a major Indian pharma company 3.4.3 Comparison between a major Chinese biotech company and a major Indian biotech company 3.5 How financial crisis will affect the growths of pharma outsourcing industries in both countries: Comparison of future growth potentials of pharma outsourcing industries between China and India 3.5.1 Future growth potential of pharma outsourcing in China 1. Major short-term growth resistor: Financial crisis 2. Long term growth drivers and resistors 1) Growth drivers a. Internal drivers b. External drivers c. Three outsourcing waves 2) Growth resistors: Challenges Chinese companies are going to face 3.5.2 Future growth potential of pharma outsourcing in India 1. Major short-term growth resistors: Impacts of terror attack and financial crisis 2. Long term growth drivers and resistors 1) Growth drivers 2) Growth resistors Chapter 4. Which Country Best Fits Your Outsourcing Investment? – A Series of Case Studies Summary 4.1 Introduction

4.2 Analysis of real motivations behind different outsourcing strategies played by major pharma/biotech companies in China and India 4.2.1 Different importance of China vs. India to major pharma/biotech companies for long term investment 4.2.2 Different outsourcing strategies played in China and India by major pharma/biotech companies 4.3 Case studies: Examples of drug companies around the world closely collaborating with Chinese and Indian companies 4.3.1 Collaboration between a major Western company and an Indian company 4.3.2 Collaboration between a major Western company and a Chinese company 4.3.3 Collaborations of a major Western company simultaneously with a Chinese company and an Indian company in similar therapeutic areas 4.4 Summaries of more outsourcing collaborations happened in recent two years between Western companies and Chinese or Indian companies 4.5 Where to choose your outsourcing destination: In-depth analyses of pharma outsourcing features of both China and India Classifications of Top 100 Best Outsourcing Service Providers in China and India 1. List of top pharma companies in China and India 2. List of top biotech companies in China and India 3. List of top CROs in China and India 4. List of top CMOs in China and India 5. List of top API and generic drug makers in China and India 6. List of Chinese and Indian companies with Level 5 service capability 7. List of Chinese and Indian companies with Level 4 service capability 8. List of Chinese and Indian companies with Level 3 service capability 9. List of top CROs in China and India for drug discovery service 10. List of top CROs in China and India for process R&D 11. List of top CROs in China and India for medicinal chemistry research 12. List of top CROs in China and India for preclinical research service 13. List of top CROs in China and India for ADME/Tox study 14. List of top CROs in China and India having non-human primate animal testing facilities 15. List of top CROs in China and India for clinical research service 16. List of top CROs in China and India having central lab service 17. List of top CROs in China and India in genomics and proteomics research 18. List of top Chinese and Indian pharma companies having internal R&D programs 19. List of top Chinese and Indian pharma companies having drug candidates in late development stages 20. List of top Chinese and Indian pharma companies having products marketed globally 21. List of top Chinese and Indian pharma companies having global presences Appendix

Appendix I. Research Methodology Appendix II. About JZMed, Inc. List of Tables Table 1. Comparison of labor costs in various locations of the world (FTE rates) Table 2. Market distributions of each service sector in Chinese pharma outsourcing industry (2007 and 2008) Table 3. Market development history of Indian pharma outsourcing industry Table 4. Market distributions of each service sector in Indian pharma outsourcing industry (2006/2007 – 2007/2008) Table 5. Market development of global pharma outsourcing industry in recent five years Table 6. Market development history and future growth forecasts of each service sector of global pharma outsourcing industry (2006 to 2010) Table 7. Comparison of higher education between China and India Table 8. Comparison of technical workforces between China and India in pharma-related industries Table 9. Comparison of labor and material costs in pharma outsourcing industries between China and India Table 10. Current market sizes and future growth forecasts of Chinese pharmaceutical market Table 11. Market development and future growth forecasts of Indian pharmaceutical markets Table 12. Drug product development pipelines of Indian pharma and biotech companies Table 13. Drug product development pipelines of Chinese pharma and biotech companies Table 14. Head-to-head comparisons of advantages and disadvantages between China and India in pharma outsourcing-related industries Table 15. Classification and definition of contract pharmaceutical research and manufacturing service capability levels Table 16. List of top 50 best service providers in each country (In alphabetic order of company names) Table 17. Comparison of distributions of service providers Table 18. Comparison of professional service providers in each service sector Table 19. Comparison of outsourcing service capabilities between Chinese companies and Indian companies Table 20. Comparison of internal R&D programs between Chinese companies and Indian companies Table 21. Comparison of companies providing service in biopharmaceutical manufacturing Table 22. Comparison of global presences of Chinese companies and Indian companies Table 23. Summary of latest acquisitions of Western companies by Indian companies Table 24. Summary of comparisons between Chinese companies and Indian companies in pharma outsourcing-related industries Table 25. Comparison of WuXi PharmaTech with GVK Biosciences Table 26. Comparison of Harbin Pharmaceutical Group with Ranbaxy Table 27. Comparison of Shanghai Sunway Biotech Co. with Intas Biopharmaceuticals

Ltd. Table 28. Comparison of predicted future outsourcing market developments between China and India (2009 and 2010) Table 29. Head-to-head comparison of outsourcing collaborations of Ortho-McNeil Jassen Pharmaceuticals with a Chinese and an Indian company Table 30. Summary of outsourcing collaborations happened recently between Western pharma/biotech companies and Chinese companies Table 31. Summary of recent outsourcing collaborations between Western pharma/biotech companies and Indian companies Table 32. Summary of Western CROs/CMOs establishing presences in China or forming partnerships with Chinese counterparts Table 33. Summary of Western CROs/CMOs establishing presences in India or forming partnerships with Indian counterparts List of Figures Figure 1. Development history of Chinese pharma outsourcing market Figure 2. Current market distributions of each service sector in Chinese pharma outsourcing industry (2008) Figure 3. Market development history and future growth forecasts of India’s CRAMS sector Figure 4. Indian pharma outsourcing market growth history Figure 5. Market growth history of Indian contract clinical research service sector Figure 6. Current market distributions of each service sector of Indian pharma outsourcing industry (2007 − 2008) Figure 7. Comparison between China and India of market shares of each service sector in each country’s total pharma outsourcing markets (2008 data) Figure 8. Global pharma outsourcing market: Growth history and future development forecasts Figure 9. Market distributions of each service sector in global pharma outsourcing industry Figure 10. Global contract research service: Market development, distributions and future growth forecasts of each sector (2006 − 2010) Figure 11. Chinese pharmaceutical market composition of 2008 Figure 12. Development history and future growth forecasts of Indian pharmaceutical market Figure 13. Classification and rating of CROs and CMOs Figure 14. Impacts of financial crisis on Chinese pharma outsourcing industry Figure 15. Comparison of near future pharma outsourcing market sizes between China and India (2009 – 2010) Figure 16. Comparison of future market growth potentials of Chinese and Indian pharma outsourcing industries (2010 − 2015) Figure 17. Wholly-owned R&D centers established in China by major pharma and biotech companies Figure 18. Major pharma and biotech companies having manufacturing facilities in China Figure 19. Analysis of different investment strategies of major pharma and biotech

companies in China and India Figure 20. Summary of outsourcing models of major pharma and biotech companies in China and India Figure 21. Comparisons of activities of Chinese companies and Indian companies in overseas markets Figure 22. Examples of recent investment activities of Western VCs in China Figure 23. Some typical shortcomings of China and India in pharma outsourcing

About JZMed, Inc. JZMed, Inc. is a leading pharmaceutical outsourcing service provider that specializes in services for pharmaceutical and biotechnology industry. The company’s primary focus is to help Western pharmaceutical and biotech companies explore the opportunities in China, including tapping the Chinese pharmaceutical market and the resources available in Chinese pharmaceutical industry. Meanwhile, it also provides intelligence and market research services to these companies to facilitate their entrance into the Chinese pharmaceutical market or collaborations with any Chinese companies. The company has had opportunities to provide services to and collaborate with a variety of pharmaceutical and biotech companies worldwide that focus on drug discovery, development and/or manufacturing. It also has a network of preferred contract pharmaceutical research and manufacturing companies in China.

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Information about the Report: Author: Jim J. Zhang, Ph.D. Publisher: JZMed, Inc. Total number of pages: 152 Date published: July, 2009

Readers interested in the report can contact JZMed, Inc. at [email protected]. Report ordering can also be processed through Paypal, secured online payment, directly at the website of JZMed, Inc. (www.jzmedi.com). All major credit cards are accepted.

Note: An Appendix to the Report: “Top 100 Best Pharma Outsourcing Service Providers in China and India”, is available at JZMed, Inc. and can be ordered separately.