As the US dollar has weakened considerably as compared to just about every other global currency and the US economy is in a downturn trend, US based pharmaceutical manufacturers must pay closer attention to the trends towards globalization. US companies can no longer exist on past technology dominance or view India as merely places for manufacturing and clinical trials. They must embrace the globalization brought on by India’s emergence as a dominant player in the pharmaceutical manufacturing sphere.

Research at Duke and Harvard shows that Indian companies are performing the most advanced types of R&D for multinational corporations. Scientists from those corporations are rapidly developing the ability to innovate and create their

own intellectual property. The global market has changed dramatically over the last decade, and a new era of even more globalization is to come. A significant change in globalization is Supply Chain Distribution. Where the supply chain in healthcare used to be contained, within a country’s R&D, clinical trials, and distribution, it is now fragmented and decentralized. Today, R&D, clinical trials, manufacture, and sales can be done in any part of the world, across a wide array of industries.

For example, India is the world’s second largest supplier of childhood vaccines and fourth largest supplier of pharmaceuticals. The Indian pharmaceutical industry continues to grow and is expected to see a 25% growth in revenue and 45% increase in net profits this year. This growth is based on increased sales domestically and internationally as well as the depreciation of the rupee.

Indian manufacturers are proactively moving to place their products in the global market. Lupin, Glenmark Pharma, Alembic, Aurobindo and Jubilant Organosys are all working on mergers and acquisitions in the USA and Europe.

Meanwhile, manufacturers face more regulation and competition since the implementation of patent regulation in India in 2005. To remain competitive, they can strategically increase their R&D divisions. Due to India's lower cost for R&D and clinical trials, Indian manufacturers can become a dominant force in the global R&D arena while continuing to provide out-sourcing services for R&D functions of American and European manufacturers.

An example of the new types of innovation and R&D coming out of India is Dr. Reddy's Laboratories, which is developing a poly pill, which combines the four most common medications taken by heart patients—anti-hypertensive, statin, beta-blocker and aspirin—into a single pill. Another example is Ranbaxy Laboratories that is focused on finding treatments for neglected diseases endemic to the developing world, including anti-malarial drugs and pediatric formulations of HIV/AIDS drugs.

How does India’s emergence in the global market affect the US? Out-sourcing is becoming more prevalent in the pharmaceutical industry, with the growth rate for pharmaceutical R&D outsourcing between 2001 and 2010 will be 16.3% per annum, resulting in a total market value of $36 billion by the end of this period. US manufacturers should look to globalization as a new market opportunity for ventures, partnerships, and product development.