Increasing numbers of pharma companies are heading East to conduct R&D operations in India as globalisation makes it a small world. Just as a call to your bank might involve a long-distance connection to a call centre in India, pharma R&D is likely to have an Indian accent in the future. Attracted by a largely untapped, skilled and English-speaking workforce pharmaceutical companies are following suit, with more and more firms conducting clinical trials and setting up R&D facilities in India.

Research conducted last year by clinical research consultancy Oxygen Healthcare estimated that 1% of global clinical trials are currently conducted in India. This figure, the research suggested, could increase to 10% in the next five years and the country has the potential to be the premier destination for conducting global clinical trials.

Big pharma is already shifting eastwards according to Juerg Haelelfinger, deputy director of Roche's pharmaceutical division, reasoning that “no big pharmaceutical company can afford not to be present in India”. Roche has committed circa $20m to its Indian operations and Pfizer has doubled its R&D spending in India to $13m. Eli Lilly and Novartis are also expanding their R&D operations in the country.

Last month, AstraZeneca laid the foundations for an R&D facility in Bangalore. The facility forms part of AstraZeneca's $10m investment in India and the company hopes that its Indian operations will “play a crucial role in taking the discovery phase of research to bringing drugs to the market”.

GlaxoSmithKline is also eager to grab a piece of the action. Its vaccines business, GSK Biologicals, has vowed to make India its global hub for clinical R&D and plans to conduct four clinical trials in India this year. “We are now significantly increasing investments on clinical R&D and have every intention to make India a global centre for clinical trials,” confirms Sanjoy K Datta, South Asia director of clinical R&D and medical affairs at GSK Biologicals.

Pharma's attraction to India has been boosted by last year's confirmation from the Indian government that it would, for the first time, honour its pledge to the World Health Organisation and recognise the patents of foreign drugs. Previously, India had refused to recognise pharmaceutical patents and a number of its pharmaceutical companies have created profitable businesses by copying foreign drugs using a different manufacturing process to the original product.

However, concerns remain. Maxine Taylor, former director of corporate affairs at Eli Lilly admits that the main challenge pharma faces when operating in India is intellectual property protection. “This is being closely scrutinised and could hinder further investment by the industry unless progress continues to be made,” she reveals.

Beyond regulation, it is no surprise that India is such a mouth-watering prospect for pharma firms. Cost is, undoubtedly, a major factor. “The cost of trials continues to escalate in much of Europe, the US and Japan, whereas in India, as in many other areas of business, pricing is highly competitive,” says Taylor. Sunil Shah, director of Oxygen Healthcare, agrees: “Companies in India operate on about a third of the cost-base to Western companies.”

Recruiting patients for clinical trials is also a huge bonus, as India has a huge population with many untreated patients who are currently taking no other medication. “India provides access to patients with diseases common to Europe and North America, as well as tropical diseases,” says Alan Boyce, vice president of Europe for Kendle.

“In addition, the training and experience gained in Western countries by many investigators has resulted in closer alignment to international standards in clinical research.”

India will undoubtedly become a world leader in global research for pharma and this sector is likely to follow the massive success the country has had with regards to information technology. The logic of Globalisation should result in lower cost R&D for new drugs leading to worldwide benefits.