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Convergence
Smarter outsourcing in drug discovery Practices such as outsourcing clinical data management are now being adopted by drug makers as funding gets tighter. IT biggies in outsourcing are reaping the benefits, informs Shijith
There has been a lot of attention in recent years on the outsourcing of pharmaceutical research and manufacturing to India. While domestic pharma majors may be the beneficiaries of this trend, the original giants of outsourcing are not lagging far behind. IT behemoths like TCS and Wipro are grabbing a piece of the pharma outsourcing pie by getting involved in clinical data management. TCS recently secured a deal with Eli Lilly, which includes the establishment of a facility in Noida. Other pharma companies too have outsourced clinical data management operations to India including Pfizer, GlaxoSmithKline, Novo Nordisk and Wyeth. Few are aware of the enormous efforts that go into the making of a successful drug. Long before any drug is launched in the market by a pharmaceutical major, it has to undergo various stages of clinical trials. These trials treat groups of patients with the drug and examine how safe it is, how effective it is as a cure along with its effects on different demographics. The entire exercise medical condition of the patients and their responses to the treatment produces a huge amount of data throughout the day for several years. Says KV Subramaniam, president and CEO of Reliance Life Sciences, the data generated from such trials need to be valid and reproducible for study. Such data have to be readable regardless of the system they are entered into, and analysable across trials. He adds: Clinical data management (CDM) aims to produce clinical trial data that have integrity and are analysable. While it involves data entry and coding at its most basic level, CDM also includes the preparation of study reports as well as more advanced activities like statistical analysis of data. Interestingly, the first major deal in CDM was the 10-year outsourcing deal between Accenture and Wyeth struck 4 years ago in 2002. The CDM market, however, has been picking up in the last two years. There has been activity not only from the giant outsourcing firms but from companies like Biocon and Reliance Life Sciences too with the latter reportedly setting up a Rs 500 crore clinical data management centre in Bangalore. Clinical data management represents an opportunity for India to graduate on the value chain in information technology enabled businesses, says Mukesh Ambani, chairman, Reliance Industries.

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The figures on the industry give out a confusing impression though. On the one hand, there are signs of its potential while on the other hand, there are reminders of how much yet it has to grow. Global pharma companies invest billions of dollars in R&D with the annual spends of the top 40-pharma companies around $52 billion. A pharma company spends around $1 billion introducing a new drug, of which around $250 million would be spent on clinical trials alone. And of that, around $15-20 million would be spent on CDM activities. The message: There is a huge pool of R&D investment out there to tap into. While the potential exists, the clinical data management market is in its infancy at the moment. Says Kapil Khandelwal, head of healthcare at Wipro Healthcare and Life sciences, the spend in India on clinical trial research and management informatics, of which CDM forms a part, is around $400-500 million. This is only around 4-5% of the global spend. Also, CDM forms a very small part of the portfolio of the giant outsourcing companies. Kishore Rachapudi, head of the pharma and life sciences business at Satyam estimates that CDM contributes only around 1-2% of the annual revenues of the life sciences vertical at Satyam. CDM outsourcing arrangements vary from company to company. In Khandelwals experience, the CDM processes that are outsourced are usually those that are highly technical and very specific in scope. For Rachapudi, functions like project management, the development of inclusion/exclusion criteria for trials and protocol development are usually kept by the pharma company, with the rest being outsourced. Sairamkumar Jayaraman, director of life sciences practice at Cognizant, has also seen companies choose to offshore all the CDM activities but in specific therapeutic areas. There are several factors behind pharma companies outsourcing CDM, and to IT firms in particular. Rachapudi puts it down to the dissatisfaction with the traditional CRO (clinical research organisation) model. Sourcing out operations like CDM isnt a new development for pharma companies who have a history of doing so to CROs. What IT firms offer extra, for Rachapudi, is a process orientation that leads to the optimisation of the entire life cycle. They also offer the opportunity of reducing the number of vendors that pharma companies have to deal with. An integrated offering can be provided that combines elements of clinical data management with traditional business process outsourcing. IT firms are better equipped in meeting the computational work involved high-end work like advanced data modeling in drug R&D. And, while reduced cost is a significant factor, JJ Rajagopal, head of global life sciences and healthcare at TCS, looks to downplay its importance. This isnt a typical cost-saving venture, here its critical to get the quality right, he says.

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For him, most of the discussions with the clients revolve around the ability to provide a scalable model. A push to reduce the time-tomarket as well as differing requirements of the various drugs coming down the pipeline, could necessitate the recruitment of 100-200 people in different domains in a very short time. These operations require people with highly advanced domain knowledge and outsourcing to India has the advantage of tapping into the scientific manpower available here. In fact, the need for people possessing higher skill sets MScs and PhDssets the outsourcing of CDM apart from the outsourcing of other business processes. Yet another factor that makes CDM outsourcing different is the high amount of regulation involved with the USFDA guidelines that need to be met. This is understandable given that ultimately peoples lives are being put at risk. Jayaraman points out the need for more stringent information security in such outsourcing. The data which is outsourced is highly sensitive patient data and has to be subjected to rigorous checks and measures to protect its privacy, he says. With the increased outsourcing of clinical trials to India, the IT firms are also well placed to fulfil the data management needs of such trials. And, in partnerships with the CROs, they even help conduct them. The downside of the entire market scenario, however, is that IT firms dont expect to be getting any business from Indian pharma companies anytime soon. Even if Indian pharma are slowly moving into drug discovery, predominantly, they are generics based. Summarises Rajgopal: they dont have sufficient molecules in the pipeline, and unless they have that, it doesnt make sense for them to outsource CDM.

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