With the growing compliance to global regulations, India is increasingly emerging as a global hub for contract research outsourcing. Of late, India has been emerging as an attractive destination for contract research outsourcing. Outsourcing is not a new concept to India. In fact, India has proved its mettle by being successful in outsourcing business processes of IT, software and financial services. Contract research outsourcing, which broadly covers clinical research outsourcing and drug discovery research outsourcing, has been offering a host of related services in India.As per CHA's (Cambridge Health Associates) 2006 survey of 235 pharmaceutical executives, more than 75% of the top 50 western biopharmaceutical companies are carrying out drug development activities in India. This number speaks for itself about the kind of vested interest that global companies have in outsourcing their business to India.

According to a report by Ernst & Young, India's contract research market can reach $300 mn by 2010 at an estimated growth rate of 20-25% annually. As the global companies are confronted with mounting pressures to cut down their ballooning R&D costs, low-cost destinations like India are increasingly looking attractive. India has been successful in tapping this business opportunity to garner a significant chunk of this outsourcing pie.

Earlier, global pharmaceutical companies believed in the concept called "insourcing" where they opened research laboratories in their own countries to shore up their manufacturing facilities. However, the increasing R&D costs adversely affected their bottom line with dampening profits. This caused companies to move a step further towards contract research outsourcing to fasten the drug development cycle. Contract research outsourcing has been successful in reducing R&D costs, drug development costs, and has hastened the time to market. The strategy has in turn helped companies to retain their competitiveness and to concentrate on their core businesses. Though India has a huge potential to manage the outsourcing business, prior to 2005, it couldn't attract much business due to its lack of product patent protection regime.

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