Most of the manufacturing work of pharmaceutical companies in the US and Europe is being outsourced to India and China. These outsourced works are being systematically handled with the help of various methodologies including project management. This paper aims to analyze the key determinants of successful implementation and delivery of projects to pharmaceutical clients who outsource the work to Indian vendors. A case-based approach is taken to study the project management processes of a major Indian pharmaceutical vendor to deliver the projects to the clients. The study comes out with a set of key determinants which influence the success of a project. It also sheds light on the vendor’s ability to delight the client by meeting or exceeding the requirements of the project as laid out in the Service Level Agreement (SLA) between the client and the vendor. The study also provides critical managerial implications and authentic insights into the processes involved in the execution of pharmaceutical outsourcing projects in the Indian context.

Indian pharmaceutical industry has made great strides since 1991 with the opening up of Indian economy to the forces of liberalization, privatization and globalization. As per IMS Health India (2010), the turnover of the industry is around US$21 bn and domestic market is worth approximately US$12 bn. India is the fourth largest market by volume and thirteenth largest by value. India became a hub for global innovator pharmaceutical organizations in Contract Research and Manufacturing Services (CRAMS) and clinical trials due to low-cost labor and high quality standards. The value chain of the pharmaceutical industry mainly consists of chemical intermediates, active pharmaceutical ingredients and formulations. A recent development in the industry was the significant surge in the revenues from CRAMS in a Business-to-Business (B2B) context.

Pharmaceutical industry thrives mainly on innovation or drug discovery (Hamel and Prahlad, 1990). The global pharmaceutical giants formulate strategies to bring new drugs to the market to cater to the critical unmet medical needs. The success of these firms hinges on the speed and the consistency with which the new products in the Research and Development (R&D) pipeline get commercialized (Drews, 1998). Despite breakthroughs in combinatorial chemistry and other screening technologies, the drug discovery program still takes around 12 years and a minimum cost of US$800-1,200 mn to bring a new drug to the market. In order to achieve the twin objectives of ‘speed to market’ and ‘cost-effectiveness’, the global innovator companies (clients) outsource the non-critical activities to firms (vendors) in India (Ford and Sterman, 1998), China and other geographies to reduce cost and time.

Operations Management Journal, Key Determinants, Successful Project Delivery, Pharmaceutical, Outsourcing, Service Level Agreement (SLA), Business-to- Business (B2B), Research and Development (R&D).