'Outsourcing' set to catch up

India's companies offer a massive cost advantage. "While the average R&D cost in the US is $400,000, it is $250,000 in Europe and only $50,000 in India," said Motti.

The huge costs involved in drug development and the low potential for success and cost recovery will push more pharmaceutical firms to outsource drug development.

Contract R&D has been showing a 500 per cent growth and Indian pharma firms with good track record in R&D and adequate capacity will attract big pharma majors.