Sanofi-Aventis is the latest big pharma player to plug into the cost advantages and formulation skills that have made India such a powerhouse in the generics sector. The French-based company has inaugurated its first Asian pharmaceutical development centre in Goa, India.

The Goa development centre (GDC) represents Sanofi-Aventis’ single largest investment in India to date, the company said, without disclosing any financial details. As Sanofi-Aventis’ first Asian hub for analytical and pharmaceutical formulation development, the 2,600sq m facility will have the capacity to develop up to 12 pharmaceutical compounds a year, the company noted.

“The GDC will be a cornerstone of our success in Asia and should enable us to leverage our formulation development efforts worldwide,” commented Olivier Charmeil, senior vice president, Asia Pacific.

The Goa facility will be pivotal to the rapid launch of new products both in the Asia Pacific region and the global marketplace, enhancing the company’s ability to develop and manufacture “medicines adapted to local market needs in an efficient and cost-effective manner”, Sanofi-Aventis said. The initiative also reflects the company’s strategic ambition to boost its presence and accelerate growth both in India and Asia.

Roots to 1923
Sanofi-Aventis’ Indian roots go back to 1923, via its May & Baker subsidiary. It has two production sites in the country – in Ankleshwar and Goa, the latter close to the new development centre – as well as regional offices in Mumbai, New Dehli, Kolkata and Chennai. The Sanofi-Pasteur vaccines business has 15 regional offices throughout the country, bringing the total Sanofi-Aventis headcount in India up to around 2,000.

A report last year by consultants McKinsey & Company identified research and development (R&D) as one of the pharmaceutical functions most at risk of being shifted to lower-cost offshore locations. The offshoring trend was expected to grow at a rate of 16% per year to include 21,000 employees by 2008.

With an estimated 35% of industry costs going on staff, pharmaceutical analyst Stewart Adkins has calculated that $1.1bn a year could be saved if 70% of production staff, 30% of R&D staff and 20% of administration staff were sourced from cheaper markets such as India and China.