Outsourcing drug discovery services, including chemistry, biology, screening and lead-optimisation are all a part of doing business in today's pharma industry, as the trend for outsourcing becomes more widely accepted by companies, both large and small, needing to supplement their own internal drug discovery efforts and/or utilise technologies they can't afford to do in-house.
The growth is also being fuelled in part by impressive advances in the Asian market, where drug discovery services cost only a fraction of what they do in the West - a very attractive prospect for many pharma companies who are seeking outside assistance for traditional in-house services in order to reduce the huge burden of drug discovery and development, which is increasing by nearly 50 per cent every five to seven years.
Upon discovering the benefits of outsourcing in Asia, many of the top pharma and contract research organizations (CROs) have opened their own operations there, leading also to improvements in quality of infrastructure and services.
"The upgraded quality of CROs and pharma firms in India, China and Eastern Europe makes outsourcing a cost-effective and timely business decision which can translate into drugs coming to market faster and revenues increasing," said Jack Gardner, the report's author.
However, concerns of IP protection, trust, honesty, and transparency, particularly in Asia, still remain large obstacles in the global drug discovery outsourcing marketplace, said the report, titled Outsourcing in Drug Discovery, 2nd Edition.
Although China has strengthened its commitment to intellectual property by agreeing to adhere to the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement as part of its entry into the World Trade Organization (WTO), many drug companies are still weary of how much this adherence will protect them.
In particular, a new "one drug, one patent" policy interpretation means that in China patent protection will only apply to the original use of a drug, as stated in the patent. This will be of great disadvantage to multinational companies, which increasingly seek to develop and market new uses for their existing drugs.
More than 70 per cent of pharma executives said that threats to intellectual property pose a business risk in China, with 62 per cent considering patent protection in India an issue, a recent survey by Ernst & Young revealed.
India also now adheres to the TRIPS agreement and has enacted the Patent Protection Act in 2005 to protect intellectual property. But at this stage, no one knows how long it will take for the benefits of the new law to take effect and many multinational companies were not completely satisfied with the scope of the law and are continuing to work with the government to address ongoing concerns.
"Despite any of the risks, outsourcing has become a necessary means of doing business and shows no sign of slowing," said Gardner.