Owing to tailwinds such as technology infusion, closer industry and academia, research and development (R&D) activities in India’s pharmaceutical, biotechnology and ayurveda sectors is witnessing robust growth. The rising allocations are also helping the country to become a cost-effective research hub for contract R&D and collaborations with companies in the subcontinent. There has also been a rise in the approvals of Abbreviated New Drugs Applications (ANDAs) and Drug Master Files (DMFs) from regulatory authorities.
The industry is seen investing between four per cent to 10 per cent in R&D. In 2011-12 the total R&D spend was 7.2 per cent of 30 pharma companies in India which amounted Rs. 4,678 crore and these accounted for standalone sales to the tune of Rs. 65,000 crore.
R&D is the backbone that drives the future of the pharmaceutical industry globally. According to industry sources, the revenues from R&D are coming in not just from in-house projects but largely from outsourcing.
India is ranked eighth in R&D which includes pharma innovators like the US, United Kingdom, European Union, China, Japan, South Korea. Global drug majors like Eli Lilly (US) spends around 21 per cent of its total sales on R&D, while Merck (US), AstraZeneca (UK), GlaxoSmithkline (UK) ,Roche (Switzerland),Pfizer (US) ,Novo Nordisk (Denmark) spends around 17.6 per cent, 16.4 per cent, 14.3 per cent, 19 per cent, 13.5 per cent, 14.5 per cent respectively reports Battelle-R&D Magazine.
The 30 leading R &D spends in India are coming in from Dr. Reddy’s Labs, Lupin, Ranbaxy, Cadila Pharmaceuticals, Cipla, Aurobindo, Wockhardt, Sun Pharma, Indswift Labs, Torrent, Jubilant Life Sciences, Strides Arcolab, Pancea Biotec, Parabolic Drugs, Venus Remedies, Glenmark, Orchid, IPCA, Fresenius Kabi Oncology, Surya Pharma, Alembic Pharma, Unichem, Ajanta Pharma, Biocon , Suven Life Sciences, Divi’s Labs, Natco and FDC.
Now with innovator drugs going off patent valued at $73 billion, there is a huge opportunity for research in India in the areas such as generics and biosimilars, said Kiran Mazumdar Shaw, CMD, Biocon Limited. In fact Biocon alone had slated Rs. 37.70 crore investment into research in 2011-12. The company‘s effort is to develop novel biopharmaceuticals by leveraging its exceptional scientific talent pool and developmental capabilities.
However affordability is a serious deterrent for Indian pharma and biotech research. A key hurdle is the lack of interest evinced by the venture capitalists and private equity firms who are not keen on supporting high risk in investment because the entire process of product research and development have a long gestation period and the returns are not immediate, said David Wetherell, President and COO, Burrill Healthcare Venture and Private Equity, Burrill & Company .
Government support
The Union Government has been offering various types of research grants, fellowships through soft loans or equity to conduct research and commercialize technologies through the Ministry of Science & Technology, Department of Biotechnology, Department of Scientific and Industrial Research in addition to Indian Council of Medical Research and the Council for Scientific and Industrial Research.
A total of Rs. 5,679 has been sanctioned to the Ministry of Science and Technology during the Union Budget 2012-13 where DBT received Rs. 1400 crore, DSIR got Rs. 1930 crore and DST share was Rs. 2349 crore, according to Atharva Lifesciences Consulting Pvt. Ltd.
The New Millennium Indian Technology Leadership Initiative by the CSIR is the largest public-private-partnership effort within the R&D domain in the country.
It views at building a strong base and ensure that India can maintain a leadership position by combining the best competencies of publicly funded R&D institutions, academia and private industry, said Prof. G Padmanabhan, scientist emeritus and former director, Indian Institute of Science.
According to Dr. PV Appaji, chairman, Pharmexcil, the Union Government's ‘Pharma Vision 2020’ document is a platform to make India one among the destinations for end-to-end drug discovery and innovation. With this, the government is working to support and create an advanced infrastructure, internationally competitive scientific manpower for pharma R&D and venture fund for research in the public and private domain. The Government is also embarking upon a major multi-billion dollar initiative with 50 per cent public funding through a public-private partnership (PPP) model to harness India’s innovation capability. The vision is to propel the country into one of the top five pharma innovation hubs by 2020, targeting to achieve a global niche with one out of every five to 10 drugs discovered worldwide originating from India.
Among the initiatives taken by the government includes Drugs and Pharmaceuticals Research Programme, tax-cuts and weighted tax deduction at 150 per cent for the R&D expenditure.
Come April , in association with the Ministry of Commerce, Pharmexcil is organizing iPHEX 2013 at Mumbai from April 24-26, 2013 where over 400 leading Indian companies are expected to display not just pharma products but their research prowess. With increasing R&D spends, Indian pharmaceutical sector has become a cost-effective centre for world class research as also for contract R &D. Indian companies in the recent years have produced many cost-effective drugs that are affordable to the masses, said Dr Appaji.
M&A fuels R&D growth
A number of mergers and acquisitions that have taken place ensuring India's R&D strengths, dynamic scientific pool, excellence in chemistry and mathematics apart from its success in information technology.
In 2010, Nicholas Piramal sold its generic drug business to Abbott Laboratories for $3.7 billion. In 2008, it was Ranbaxy Laboratories which was bought over by Daiichi Sankyo, Japan. Among other deals were GlaxoSmithKline partnering with Dr Reddy’s Laboratories; Pfizer entering into a pact with Claris Lifesciences; Sanofi-Aventis acquiring Shantha Biotechnics and Bristol-Myers Squibb opening a research centre in India with Biocon and Abbot Nutrition slating its research efforts again with Biocon .These are all efforts for Indian R&D to get stronger, said Dr P M Murali, president, Association of Biotechnology Led Entrepreneurs (ABLE) and Managing Director & CEO, Evolva.
India is fast climbing up the R&D value chain ladder in the pharmaceutical and biotechnology sectors. The country is no longer a destination for low value R&D . It has commenced conducting high end research in the areas of nanotechnology, biosimilars, new drug development, bioinformatics , fermentation technologies, says Karan Singh, head Bain & Co in a report titled India a R&D hub in the making.
“Viewing India from the West, the country has been appreciated for its brain power and the information technology infrastructure which plays an important role in cancer is a big attraction for research institutes in the West to team up with to tap the tremendous opportunity,” said Dr. Tyler Jacks, director, Koch Institute for Integrative Cancer Research at Massachusetts Institute of Technology.
Reduction in budgets in the US and EU, increasing costs and falling productivity estimated at 70 per cent are forcing global pharma and biotechnology companies look out for R&D off-shoring and outsourcing partnerships. Where India can make a big difference is its large English speaking population talent pool. Its talent pool accounts for three million graduates in science and engineering. The country is home to the third largest technical manpower, said Prof. CNR Rao, National Research Professor and Linus Pauling Professor and honorary, president Jawaharlal Nehru Centre for Advanced Scientific Research (JNCASR).
The country is also a base for information technology which has led to knowledge processing outsourcing business which is on a growth trajectory providing the clinical data and pre-clinical research, pointed out Dr. SN Vinay Babu, managing director Bioneeds Laboratory Animals and Preclinical Services.
Major R&D innovations from Indian stables
In 2001, Biocon received a US patent for its on PlaFractor technology which is a revolutionary bioreactor. While this was for bio-manufacture, the technology led the company to focus on advanced in R&D as it combined the best of two separate fermentation methods, the sold state fermentation and the submerged fermentation techniques, to allow higher productivity at lower operational costs.
Since then it has seen IN105 oral Insulin, Anti-CD6 (T1h) for autoimmune disorders, BVX-20 for Non-Hodgkin's Lymphoma (NHL) is the most common cancer of the lymphoid organs and MAb Fusion Protein Program for oncology indications. To develop therapies that target multiple tumour types.
In 2007, Dabur developed its first nanotechnology based oncology drug delivery system Nanoxel for paclitaxel an anti cancer drug. The innovation is in the form of a new polymer-based nanoparticle that is water soluble, and to be used in an hour's intravenous infusion.
Between 2008 and 13, companies such as Glemark , Lupin and Venus Remedies have undertaken a number of research initiatives. These include drug discovery programme of Glenmark with Revamilast for respiratory and inflammatory disorders. In addition Glenmark has also drug discovery programme with Salix Pharma for developing crofelemer a first new chemical entity (NCE) which is a USFDA approved drug for diarrhoea for HIV patients and its holds exclusive rights. In January 2013, Biocon received marketing authorization from the Drugs Controller General of India (DCGI) for its novel biologic Itolizumab used for the treatment of psoriasis.
Biotech R&D trend
“The four pillars of life science are the government, industry, academy and R&D. In order to ensure a synergy in lifesciences, there is a need to encourage research and development in all facets of biotech which covers bio-pharmaceuticals, bioinformatics and synthetic biology. Now the department of biotechnology is encouraging the setting up of incubators to increase innovation. While China has 2000 incubators at its science parks, government of India is planning for 800 incubators in five years time, said Deepanwita Chattopadhyay - Managing Director & CEO, IKP Knowledge Park, which is the erstwhile ICICI Knowledge Park.
Ayurveda focus on evidence- based research
“Evidence-based Ayurveda has a holistic approach to understand the complexities of diseases and to investigate the principles of preventive medicine through the integration of Indian System of Medicine with genomics, said Prof. Samir K Brahmachari, secretary to government of India, Department of Scientific and Industrial Research and director general CSIR.
According to Dr.D B Anantha Narayan, consultant Indian System of Medicine, Union government has now set out an ambitious road map to promote
Indian Systems of Medicine (ISM), including Ayurveda, Siddha, Unani.
Promising future for India in R&D
According to the Bain & Co. Report, the country is now a base for high-end research and development in advanced in bioinformatics especially the shift from basic data base development and data mining to help enable in silico stimulation and the development of analytical tools and services for predictive biology.
The Union government too has actively intervened by bringing about various regulatory changes. To promote research and development, the government has removed the automatic approval route of FDI (foreign direct investment) in existing domestic pharmaceutical companies. As per the new rules, foreign investors will have to get an approval from the Foreign Investment Promotion Board (FIPB ) for all M&As. For greenfield investments, 100 per cent FDI is allowed under the automatic route, in which investors have to just inform the RBI about the inflows and no specific government nod is required.
The government is trying to boost innovation by encouraging R&D investment in India. The Union Budget 2012-13, announced a deduction of 200 per cent for in-house R&D for another five years till March 31, 2017.