GSK moves data management to India
management and medical trial and regulatory reporting functions to
India in a deal said to be worth over £10m (€14.7m).
GSK's latest decision is symptomatic of a growing IT, BPO and data management outsourcing trend that is sweeping the pharmaceutical industry.
Under the new deal, India's largest software firm Tata Consulting Services will establish a drug development support facility on a site already occupied by GSK in Bombay from which it will run the data management services on behalf of the UK drug heavy.
The move will create 100 new jobs for locals who are experienced in clinical-data management and programming and also have a scientific-background, adding to the 2,400 staff that GSK already employs in India at sites at Bombay and Bangalore.
Analysts estimate that off-shoring parts of clinical trial management can reap in savings of up to 40 per cent of the current cost of capturing data from clinical trials and GSK is the latest in a number of high-profile pharma firms to do so.
TCS has been a large beneficiary so far.
Last November, Eli Lilly awarded the growing firm a major multiyear business process outsourcing (BPO) contract, while Danish pharma company Novo Nordisk signed a similar deal with TCS a few months earlier.
Incidentally TCS was also recently voted number one in a North American Applications Outsourcing Report, recently released by independent research firm Forrester.
To compile the list, Forrester said it analysed 13 providers offering a mixture of application management and maintenance/support services who are viewed as prominent by its clients.
Contenders were judged across 50 criteria across three categories - current offering, strategy and market presence.
Meanwhile, data management is not the only "back-end" function being rolled out the door at big firms like GSK.
Only last month GSK announced its decision to consolidate all its human resources business process outsourcing (BPO) services under the one umbrella in a contract valued at $171m (€131m).
The news is good for IT services firm Affiliated Computer Services (ACS), who was on the receiving end of the new ten year contract.
Under the terms of the agreement, ACS will consolidate for GSK a number of services that are currently outsourced to a variety of providers or being delivered within GSK, therefore the news will not be welcomed by the undetermined number of other outsourcing firms who have lost their contracts with the UK-based drug giant.
It is not known what internal reshuffling will also result from the decision and if job cuts will follow and it is also unclear as to whether some or all of the BPO services will now be carried out by ACS in low-cost offshore destinations, such as India, and whether cost cutting was the motivating factor behind the decision.
When asked by Outsourcing-Pharma.com to comment, GSK refused.
Specific functions that ACS will now perform include payroll processing and benefits administration for GSK in the US, as well as employee and manager self-service portals and integrated online tools for several HR processes across US and UK businesses, said a statement released by ACS.
Business services provider Genpact also signed a multi-year deal with GSK to provide the drug giant's UK operations with finance and accounting (F&A) services, Genpact's largest business.
Under the terms of the contract - which is the third in two years to be signed between the two companies - Genpact will support UK-based F&A processes ranging from corporate consolidation to statutory reporting.
Meanwhile, Swiss giant drugmaker Novartis recently signed a contract deal with services provider Genpact to outsource some of its business processes to India.
India-based Genpact will provide the pharma division of Novartis with support in accounting and purchasing activities and manage this as a global shared service, Chris Lewis, Novartis' spokesperson told Outsourcing-Pharma.com.
Evidence of this outsourcing trend is supported by recent research that suggested that more companies in the pharmaceutical industry than any other industry are set to increase their reliance business process outsourcing this year.
Both cost and process improvement were motivating factors for undertaking BPO, according to Equaterra, the consulting company that produced the research last month.
Of the 25 large pharmaceutical companies surveyed, 44 per cent of firms that had outsourced one or more business process areas planned to expand their outsourcing into new process areas, 39 per cent planned to expand outsourcing into new geographies or business units, while 22 per cent planned to expand in the existing process areas outsourced, and nobody planned to cut back their outsourcing, said the report.
