Advice You - Business

“Outsourcing in India has reached a near term peak and meaningful expansion from this point forward will result in higher costs and lower quality delivery.” Business Leaders in Asia have been saying this to each other for months now. Today, we are seeing deliberate action to

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

move capacity from India to next step destinations like Philippines, China and Vietnam.

Even major business publications have picked up on the evolving situation. Both Forbes (India: Good Help is Hard to Find) and BusinessWeek (India’s IT Challenge) recently published feature

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

articles that directly address the growing problems in India and the viability of the next step destination countries.

Looking at current events in Philippines, we can get a better idea what is going on. Sykes, a large US-based contact center and IT support organization, has

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

operations in both India and Philippines. The company said it would shift much of its Indian capacity to Philippines where it already has 7000 employees. "We moved calls to other facilities in Asia to get a higher rate of return," was the official statement from Dan Hernandez,

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

Sykes's vice-president for global strategies. But knowledgeable observers in the region say that the rate of return differential must be large for a company of Sykes’ size and prominence to forgo India after already putting capacity in place.

Ambergris Solutions is another l

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

arge contact center organization with operations in Philippines. The company just received a $43.5M investment through Telus International, a Canadian-based global IT Solutions provider. Jim Evans, who played the key local role in coordinating the deal, says his company wante

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

a “strategic investment” in the outsourcing industry in Asia and Philippines offered the best long-term opportunity given all the options including India.

As Asia Pacific VP for global B2B services provider GXS, Victor Lee oversees the professional & customer services operati

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

ons in the region. His company made the decision to direct functions with a strong customer component to Philippines because of better economics and results there. His company's analysis also indicated that costs were increasing disproportionately in India unlike Philippines.

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

As well, Victor feels that "having product development in India and professional & customer services in Philippines reduces risks."

More outspoken than most, Rick McGonegal is clear that India will not be part of his company’s plans for the foreseeable future. He is the Man

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

ging Director of RCG Information Technology, another good-sized IT solutions provider. The company already has a strong offshore presence in Philippines and has assessed the Asia Pacific region for future expansion. India, he feels, is already too crowded with numerous compan

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

ies all scrambling to hire from each other. The result is destructively high staff turnover rates, mounting salary costs and poorer English communications skills compared to that which is available in Philippines. He also cited overstretched infrastructure in India as a furth

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

er reason RCG would not consider this destination at present. According to Rick, his company has its “radar set on Vietnam and China” should their current best option of Philippines give way.

Others that appear to be moving work to Philippines include: Hewitt, which has just

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

tarted hiring staff for its newly commissioned BPO facility, and HSBC, the global banking organization, which got their BPO underway a few months ago. I am currently meeting with numerous early stage entrants to Philippines – more than at anytime during the past 3 years.

As a

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

nother anecdote, I spoke recently to the Texas-based Global Recruitment Manager of a multinational technology company who needed help attracting Indians living in the US and Canada to jobs back in India. This is no surprise since there is strong demand for returnee management

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

talent. Except that this fellow was not looking for managers, he was looking for individual contributors with 3 years of Java/C++ experience – a core skill that was once available in seemingly infinite quantities. He described, with great exasperation, the challenges his comp

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

ny faced hiring such people within India these days.

Long Live the King!

No one is saying that the King of Outsourcing will lose its dominance or its long-term attractiveness as an outsourcing destination. India created the offshore outsourcing model and it will continue dri

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

ving the industry forward because of its huge size and the remarkable competence of its managers.

If India does experience slower growth because of constrained resources in the near term, it is only because of its tremendous success over the past few years. India’s recent hir

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

ing growth has been roughly double that of the crazy dotcom boom times in North America. So, current alleged constraints are not indicative of weakness but of great success.

And besides, rising costs may be a big deal to business leaders who have to somehow budget for them.

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

ut for individual workers, who see their paychecks rise by 30% from a well timed job change, “rising costs” probably don’t warrant the same degree of concern.

If countries like Philippines and Vietnam are better options today, it is only because they have been less successful

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

at developing and attracting quality outsourcing employers in the past. The pioneering accomplishments made by India have now opened the door for these countries to receive their share of the blessings. And as for India, we can be sure they will soon be back stronger than ever

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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