Manufacturing cost gap closing among U.S., India, China

U.S. drugmakers have unrealistic expectations of the cost savings they can get by manufacturing in India, says an Indian pharmaceutical exec. The playing field is now level between the two countries, given that equipment and regulatory compliance costs are the same and India's top scientists are earning $90,000 per year.

India still has lower labor costs, but that advantage is partially offset by infrastructure shortcomings, reports the Washington Post.  It also cites an outsourcer for big pharma who predicts his labor cost savings compared with the U.S.--50 percent--could disappear within five years.

In China, meanwhile, the labor cost advantage is beginning to disappear too, thanks to inflation, accompanied by a reduction in government investment and tax rebates. Last fall, A. T. Kearney consultants projected the cost benefit may be negligible in some cases by 2015.

- see the Washington Post story