The introduction of new patent regime in 2005 will open up outsourcing opportunity of around $15 billion for bulk drugs globally.

The Indian pharmaceutical industry, in the medium term, can also look forward to another $15-20 billion opportunity in drug discovery research chain after the new regime was implemented.

According to Venkat Jasti, president of Bulk Drug Manufacturers Association, the Indian companies must gear themselves up in next few years so that they could corner a big chunk of this opportunity.

"There are two issues. Government must see that the new patent regime is adhered to in the strictest sense so that foreign companies can trust us. On the other hand, the Indian pharma industry should gear up to implement the current good manufacturing practice so that it can enter the regulated market," Jasti said.

While the outsourcing opportunity would be largely for off-patent drugs, India can also expect contract manufacturing for patented drugs as well.

"Outsourcing for patented drug may not start from day one. India as a country must prove its credential as a strict follower of intellectual property right regime. We expect such outsourcing can begin in 2008," Jasti said.

He was speaking at the sidelines of a workshop on "Good Practices in Manufacturing of Modern & Herbal Drugs: A Tool for Competitive Advantage" by Indian Chemical Manufacturers Association.

The opportunity may not be limited to a handful of big pharma companies. Experts said smaller companies had a part to play in the outsourcing chain. However, all companies vying for a slice of these orders must implement cGMP norms.

Industry people sees government's role in developing the smaller companies. "The conversion cost to cGMP could be high and not all small companies can afford it. Government should support them so that India does not miss the bus," an industry expert said.

Jasti stressed the need for collaborative approach among industry so that India can bag a bigger chunk of the opportunity.

However, industry predicted that there would be consolidation in the industry as not many players would be able to walk this competitive environment.

Presently, the Indian pharmaceutical industry was pegged at $5 billion and was expected to go upto $25 billion by 2010. Experts expected higher growth in the bulk drug sector in the short term. The share of bulk is pegged at $2 billion and it should go up to $12 billion by 2010.