IT outsourcers seeking new opportunities ought to give the pharmaceutical field a good look. Outsourcing a large portion of work will give bio-pharma companies "a competitive advantage in 2020," says a new report from KPMG. It could also mean a competitive advantage, and additional profits, for nearshore service providers.
Granted, taking on tasks related to drug development and subsequent testing is not a walk in the park. It's an amazingly complex business, and it requires very sophisticated information technology. In fact, it's very specialized, and involves lots of regulations. But there's lots of opportunity.
As Chris Nuttall of PA Consulting wrote in a special report for Nearshore Americas:
"Pharmaceutical and biotech companies spend over $20 billion per year outsourcing key elements of clinical development. Processes such as clinical trials management, data management, study statistics, site monitoring and associated IT make clinical outsourcing to Contract Research Organizations (CROs) and Business Process Outsourcing (BPO) service providers big business."
One reason this could mean big if not huge business for nearshore IT providers is the massive migration of pharma companies to emerging markets, like Latin America. As the KPMG report says, there's the potential for pharma companies to outsource some of the work within these emerging markets. Drugmakers want to sell their products there, and they want to develop drugs specific to the populations in those markets.
There's been a huge increase in the number of clinical trials being conducted in Latin America. As this report from Applied Clinical Trials tell us: "The number of clinical trials started in Brazil has increased 58% (from 153 in 2005 to 241 by 2009).... while Mexico has achieved a 49% increase in new trial starts (from 106 to 158 over the same period).
Other countries in the region will see similar growth, especially as their economies grow and people have more money to spend on biopharma products. IT providers based in those countries should at least investigate ways in which they can tap into this potential bonanza. It's not an easy market to get into, but the demand is going to be there. Just as the pioneers of nearshoring recognized the golden opportunities in the country next door, IT providers would do well to check out the opportunities in their own backyards.
Who knows? You might help find a real cure for balding heads. Some people would appreciate that.