TCS eyes deals in healthcare space

Tata Consultancy Services (TCS), the country’s largest IT services firm, is exploring more avenues in the life sciences and healthcare space as demand from clients gains momentum.

Outsourcing analysts say there are deals worth $300-400 million in the market at various stages of negotiations. Life sciences and healthcare is the sixth-largest vertical for TCS and accounted for 5.2% of the firm’s revenues at the end of fiscal year 2008-09.

TCS provides offerings in the areas of clinical trial data management , pharmacovigilance and medical device design, besides software and solutions to aid drug discovery.

There are multiple small deals ranging between $25-50 million and a couple of $100 million deals by American pharma firms in the market, said an outsourcing analyst.

“The sector has not been impacted so much by the economic slowdown. This presents an opportunity for outsourcing firms,” he said. TCS vice-president and global life sciences and healthcare head Debashis Ghosh said the firm was exploring venturing into claims processing and other knowledge process outsourcing (KPO) work in the healthcare insurance area as well as genome analysis.

Work in the area of genomics, which focuses on determining the entire DNA sequence of an organism, is already on at the firm’s innovation laboratory in Hyderabad. “Genome analysis could help ascertain what diseases a person is prone to and, thus, lead to timely prevention and care,” Ghosh said.

Meanwhile, the software services firm is also seeing strong demand from its traditional clients -- pharma companies and healthcare providers. Ghosh says there is increased pressure on pharma companies to improve R&D productivity as the spectre of patent expiry looms large over them.

One implication of that is pharma companies doing more clinical trials to assess the safety and efficacy of the drug. At the same time, healthcare regulators are becoming more vigilant worldwide. This signifies opportunities in the areas of clinical trial information management and pharmacovigilance for TCS.

While the Indian IT firm largely caters to clients in the US -- the largest healthcare market in the world-- emerging markets in Asia Pacific are also becoming more attractive as pharma companies look to tap these markets. “A lot of work related to electronic medical records and hospital management systems is happening in Asia Pacific,” Ghosh said.

He added that developments such as the Obama government’s re-look at the healthcare insurance system in the US and insurers in the West seeking to linking payments to outcome of treatment at hospitals will also spell growth opportunities for TCS.