A Rose by any other name
Be careful not to call it outsourcing
March 21, 2005
When Ramnath Reddy uses the word outsourcing, his colleague Michael Fernandes quickly corrects him. We're sitting around a coffee table in the lobby of the Fairmont Copley Plaza hotel, during a biotechnology conference.
''You mean partnership, not outsourcing," says Fernandes, who like Reddy works for Sai Life Sciences, a company with offices in Cambridge, San Diego, and Mumbai that helps biotech companies send their chemistry drudge work -- such as testing whether newly discovered drugs are toxic in animals -- to India.
Outsourcing (aka offshoring) has become a dirty word in technology circles over the past two years, as programmers in the United States lose jobs to programmers in India, the Philippines, Russia, and other low-wage countries. As the life sciences industry gets more serious about sending some of the work of developing drugs and conducting clinical trials overseas, they're trying to avoid the dreaded ''O" words.
At a panel discussion at MIT last month, Nick Terrett, a Pfizer chemist who contributed to the discovery of Viagra, noted, ''We use the term 'strategic sourcing,' not outsourcing."
Even though a growing number of pharmaceutical and biotech companies are shifting work to India, China, and Eastern Europe, among other places, I don't see outsourcing in life sciences causing as much of a ruckus as it has in high-tech. There are some good reasons why it won't -- not including the industry's feeble attempts at linguistic jujitsu.
Biotech and pharma companies are looking east for two main reasons: They want to save money, and accelerate the process of getting new drugs into the market.
Indian chemists with doctorateswork at about a fifth of the cost of their US counterparts, says Reddy, a native of Hyderabad. And drug companies conducting clinical trials often have an easier time finding doctors to help run the trial and signing up patients in foreign countries.