Demand for offshore drug manufacturing could improve quality

Like TV viewers watching oil gush from an underwater pipe wanting to believe promises that the next fix will work, so the pharma industry wants to believe that manufacturing quality can be had at low cost. Drugmakers of the West continue to shuffle manufacturing to offshore locations with cheap labor.

And India is watching the good times roll. Revenue is up by more than half over the past year, and demand for low-cost drug discovery and manufacturing services continues to rise. "India is an attractive market for the global pharma sector, as evident from increasing investment flows into the country," says Biocon chief Kiran Mazumdar-Shaw in the Economic Times. Yet the international biopharma focus is showing signs of shifting to China, where big pharma companies are staking their claims in the huge emerging market.

Although the pharma industry of the Western world is in no position to throw stones lately--thanks to egregious manufacturing violations by such leading citizens as Johnson & Johnson and Genzyme--it remains fair to question the quality standards on the subcontinent and in the East. Both India and China remain quality-challenged, despite the stretched-thin FDA's attempts to keep the playing field level. However, both countries appear to recognize that quality is an increasing variable in the West's offshoring business equation, while cost remains a constant.

Given the recent manufacturing missteps on both sides of the world, let's hope it's not the case that India's and China's rise in quality/cost-balanced manufacturing corresponds with the West's decline.

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