Since its introduction of patent protection laws in 2005, India's clinical research industry has been growing three digits, however, this growth has not been as fast as many have predicted.
A report by analysts at McKinsey estimated that clinical research in India will be a $1bn ($800,000m) industry by 2010, although many in the industry expect it will be closer to half that.
"If India wants to achieve the dream, it needs capacity building on every level, from regulatory authorities, ethics committees, hospitals and research facilities and staff training," Dr Vasudeo Ginde, president and managing director of iGATE Clinical Research told Outsourcing-Pharma.com in a recent interview.
"The bottom line is all of us in the industry need to invest time and money and then be patient - it won't take off overnight but it can happen in the next five years."
In the 1990s, only Eli Lilly, Pfizer and Quintiles were active in India, with no real meaningful investment, however, since 2002 they have stepped up this investment and a barrage of both Indian and international pharma firms and clinical research organisations (CROs) have also begun entering the market, realising the potential of this untapped region.
According to Dr Ginde, many of these companies are starting by offering bioequivalence services, then gradually expanding into clinical research using their existing talent pool, however, no CRO in India currently offers an complete end-to-end solution.
Preclinical services are not being offered by many CROs yet as Indian pharmaceutical firms only began discovering their own molecules five years ago.
"About 65 small clinical research companies now operate in India, however, none of these companies have a meaningful presence in the region yet - some of them have less than 20 staff members," said Dr Ginde.
"Companies are taking their time to assess the situation, they won't enter the region blindly."
At the moment, a lot of the new firms in the region are still testing the waters to see how operating in India works for the company and its business strategy, said Dr Ginde.
As a result, consolidation has already started and is expected to continue over the next five years as most companies will either merge or marginalise.
"By 2010 I expect there will be only 20 CROs left in India, with an 80 per cent market share will staying with the top five companies," said Dr Ginde.
"However, India's cake is big and there will be enough slices for everyone."