Steven Pearlstein’s article – “Not What the Doctor Ordered” – in today’s Washington Post makes some excellent points about the self-imposed ills of the pharma industry. Here are some additional perspectives. The pharma industry needs to figure out how to speed up its rate of new drug development while at the same time reducing the exploding costs of R&D. And, it needs to aggressively pursue new growing markets so that the rising costs of R&D can be spread over a larger scale. On both of these fronts, leveraging China and India (as talent platforms and as markets) is becoming increasingly important for the health of the pharma industry. Each of these two countries produces five times as many chemists at the bachelor’s level and three times as many at the master’s level than the U.S. on an annual basis. And, this talent costs only about one-fifth to one-third of that in the U.S. Also, given the large populations and low income levels in China and India, enrollment in clinical trials can be fast, easy, and highly efficient as a single site can recruit a much larger number of patients. According to Jean-Pierre Garnier, the recently retired CEO of GSK, the cost of Phase II and Phase III clinical trials at a top notch academic medical center in India is less than one-tenth the cost of similar trials at a second-rate medical center in the U.S. In short, if a global pharmaceutical company wants to boost its innovative capabilities while at the same time trimming its R&D budgets, it must rely increasingly heavily on China and India as R&D platforms. China, India, and other emerging economies are also becoming strategically important as markets. According to industry estimates, by 2017, pharma sales in just the big emerging markets are likely to be larger than those in the United States plus the top five European markets combined. In a highly scale-sensitive industry such as pharmaceuticals, going where the growth is becomes critical not just for the top line but also to be able to support growing expenditures on R&D.