The outsourcing of pharma production to Asia has been rising steadily over the past couple of years, but analysts expect it to skyrocket over the next few, estimating that it will reach nearly $60 billion in revenues by 2018.
A study conducted by GBI Research cites increased outsourcing specifically from Western companies as the catalyst. In 2008 through 2010, the global CMO market grew to $26 billion from $21.2 billion for a compound annual growth rate of 10.7%. Between 2010 and 2018, the market is forecast to grow an annual rate of 11%. One country expected to reap the benefits is India, where outsourcing is expected to reach $1.09 billion by 2014, a significant increase over the $400 million generated in 2010, another GBI study notes.
Outsourcing and investment in Asia goes beyond cost and affordability. In Taiwan, tax incentives and an efficient, streamlined drug-approval process have attracted the likes of Chiltern and Sigma-Aldrich ($SIAL). Big pharma and medical device companies, such as Roche ($RHHBY) and Covidien ($COV), also have recently made investments in the Chinese drug and clinical markets.
- read the study abstract
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