With most Indian companies ploughing back a sizeable percentage of their turnover into research & development (R&D) and drug discovery research gaining huge momentum today, India should develop and formalize a robust and comprehensive Intellectual Property Regime (IPR) policy. In the coming years, many innovative drugs will be launched by Indian pharmaceutical companies, thereby boosting the image of Brand India, said Dr Rajiv Modi, Chairman, CII National Committee on Pharmaceuticals and Chairman & Managing Director, Cadilla Pharmaceuticals Ltd.
According to Kiran Mazumdar-Shaw, chairman and managing director, Biocon Ltd and head, Vision Group on Karnataka, companies have realized that only research-driven businesses would ensure a strong presence in the global arena. Acceptance of WTO norms on intellectual property has led to the transformation of research projects undertaken in India.
Indian pharma and biotech companies have developed a broad range of capabilities across the value-chain from drug discovery, biopharmaceuticals, custom synthesis, in-vitro studies, genomics, toxicology, phase 2 to phase 3 clinical trial capability, data management operations and statistics. On an average , the R&D spend is estimated to be anywhere between four to 30 per cent of the total turnover or more depending on the scale of operations.
Global research scenario
The world’s leading 30 pharmaceutical companies spent a combined $112 billion on R&D in 2013, an increase of $723 million over the previous year, as per a report by the research and consulting firm GlobalData.
Further, the reports also indicated that Roche was the R&D spending leader, outlaying nearly $10 billion in 2013. Meanwhile, Novartis and Johnson & Johnson (J&J) increased their R&D spend the most between 2012 and 2013, with each adding around $500 million to their respective clinics. Novartis’ R&D spending grew by 5.6 per cent to $9.8 billion, and J&J spent $8.2 billion, which was up by 6.8 per cent from 2012.
According to Adam Dion, industry analyst, GlobalData, the increase in R&D spending was partly due to drug makers advancing their pipeline programmes into later-stage clinical trials, which are generally more costly.
Dion comments: “Roche’s R&D spending was bolstered by continued investments in its oncology and neuroscience therapeutic areas, such as the company’s investigational anti-PD-L1 antibody targeting lung cancer, and the advancement of its programmes for Alzheimer’s disease.
“Novartis’ R&D spending grew largely due to its Alcon subsidiary, which allocated additional resources to R&D to develop new eye care products. The company’s Vaccine and Diagnostics products business invested heavily to bring to market its meningitis B vaccine, Bexsero.”
Despite the sector increase in R&D spending, a number of large pharmaceutical firms pulled back on clinical investment in 2013.
“In efforts to improve profit margins, cost-cutting still remains a strategic necessity for some players. Many companies reduced their workforces to help stabilize profits in the aftermath of patent losses,” said the analyst.
“Pfizer shaved over $1.2 billion in R&D spend after losing market exclusivity on Lipitor and Caduet, while Merck continued with its multi-year restructuring programme, cutting over $600 million from its clinical operations in 2013 after its respiratory therapy Singular saw its patent lapse,” the report noted.
Govt keen to boost research
Union government’s Ministry of Chemicals and Fertilizers is keen to work with the pharma and biotech industry and make suitable amendments in policies to spur not just manufacturing, but focus more on research and ensure a more fuller utilization of the country’s technically trained manpower , according to Minister of State for Chemicals and Fertilisers, Hansraj Gangaram Ahir.
The recently concluded 12th National Pharmaceutical Conclave organized by the Confederation of Indian Industry (CII) became a platform for the central government to highlight the initiatives mulled in the area of pharma and biotechnology to boost growth.
The two-day event brought together pharma associations: Indian Pharmaceutical Association (IPA), Indian Drugs Manufacturers’ Association (IDMA), the Organisation of Pharmaceutical Producers of India (OPPI) and the Bulk Drug Manufacturers’ Association (BDMA) along with the heads of companies.
Dr V K Subburaj, Secretary, Department of Pharmaceuticals, said it was time for action and not for preparing another set of recommendations. He insisted both government and industry to sit together and decide what needed to be done to bring pharma and biotech research and manufacturing out of the low growth phase that it had entered into in the past couple of years.
“Incentives to encourage research were important, said Navreet Singh Kang, Additional Secretary, Ministry of Health & Family Welfare and Director General, Central Government Health Scheme adding that government wanted to partner with industry on clinical trials and assured to undertake the necessary administrative machinery changes needed.
CII’s National Committee on Pharmaceuticals reiterated the need for a collaborative approach between the pharmaceutical industry and the government to innovate in India. While the Indian pharmaceutical industry is taking great strides in manufacturing and developing in India, there is a great need to encourage innovation in India and help maintain the country’s competitive edge.
“Indian pharmaceuticals industry is the world’s third biggest market by volume with a compounded annual growth rate of 15 per cent over the last five years. It is expected to attain a market size of US$ 45 billion by 2020.
The inclusion of the pharmaceuticals, in the Make in India campaign provided an opportunity to the industry to push its agenda of R&D, innovation and affordable healthcare for all. India is ready to become the ‘Pharmacy of the World’ by giving greater impetus to quality, exports, public-private and private-private partnerships,” said Dr. Modi.
“To improve access to medicines and healthcare, we believe collaborative multi-sector approaches that meet both the Government’s policy objectives and ensure patient access to innovative medicines. Policy, regulatory and legal reforms could substantially improve the business environment for the biopharmaceutical sector in India, in addition to supporting the new Government’s goals of bringing growth to India through research, innovation and manufacturing,” said K.G. Ananthakrishnan, Co-Chairman, CII National Committee on Pharmaceuticals and Managing Director, MSD Pharmaceuticals Pvt Ltd.
Technologies driving R&D
Advanced technologies like high throughput screening, liquid chromatography system allows operators, scientists and laboratory managers to reach new levels of laboratory efficiency. Specifically HTS can accelerate the speed at which compounds can be tested. Another area of investment by R&D centres of pharma and biotech companies is e:R&D which helps to reduce the cost of pre-clinical studies, said KV Venugopalan, president, Waters India.
Pharma companies have also said that investment in technology has transformed the early part of pharmaceutical research and development process. The introduction of e:R&D has enabled use of in-silico technologies to speed up the selection process of drug candidates and increase the overall chances of success.
Indian researchers on global pharma radar
R&D is the key driver to growth which enables corporations to achieve core competence and derive economies-of-scale to globalize their operations.
Indian companies have started recognizing the importance of R&D and have started spending anything between two per cent and four per cent of their sales for the same.
Moreover, the country ‘s pharma and biotech sector has been approached by global drug majors to collaborate in certain areas of expertise. The scientific acumen and substantial efforts in R&D have led many countries also to ink memorandum of understandings to boost bilateral scientific and technological cooperation and enhance collaboration between the scientists of these nations.
A recent effort was by Scottish Development International, the international arm of Scottish Enterprise, which inked two strategic tie-ups. These included agreements between University of Dundee & Bangalore BioCluster and Scottish Association for Marine Science with Annamalai University & AMET University, respectively, for research in Life Sciences and Marine Biotechnology.
The collaborative project partnerships would address India’s critical needs in health, life sciences and biotechnology, said Prof. CNR Rao, National Research Professor Linus Pauling Research Professor & Honorary President Jawaharlal Nehru Centre for Advanced Scientific and chairperson Vision group on Nanotechnology in Karnataka. .
This year, Biocon and the US-based CytoSorbents Corporation have expanded the scope of their strategic partnership for CytoSorbents’ CytoSorb cytokine reduction therapy to treat patients experiencing severe whole body inflammation, often called a Systemic Inflammatory Response Syndrome (SIRS).
Indian researchers cannot be ignored by the western world and we are a critical component of innovation in the global market, said Prof. Rao.