Cheap Drugs vs. Lost Jobs

This (reg. required) little tidbit from Businessweek will no doubt force future liberals to deal with a tough conundrum.

For years, software companies have slashed costs by hiring inexpensive programmers and engineers in India. Now Big Pharma is discovering the same benefits. Pfizer (PFE ), GlaxoSmith-Kline (GSK ), and Novartis (NVS ) are tapping into India's research and manufacturing prowess to cut costs and speed development of new drugs.

That's a big change for India. Foreign drugmakers have long shunned the country because of its lack of patent protection. But on Dec. 22, the Indian government introduced a bill that would toughen intellectual-property rules. If passed, it could help double the drug-outsourcing business, to $800 million, by 2005, says Bombay brokerage Kotak Institutional Equities.

A host of Indian players already are in the outsourcing game. Hyderabad-based Divi does chemical synthesis for Merck (MRK ), Abbott (ABT ), and Glaxo. In Bangalore, Biocon has 300 scientists doing contract research, up from just 25 in 2000, after sealing deals with Pfizer, AstraZeneca (AZN ), and Bristol-Myers Squibb (BMY ). While these contracts are just a fraction of the global pharmaceutical business, expect many more such deals as India becomes competitive in yet another knowledge industry.

We can get cheaper drugs, which everyone wants, at the cost of lost jobs, which no one wants. If only the cheap drugs could come at the expense of profits instead, then "the people" would be happy. (Yes, that is a hint of sarcasm)