As the western nations are increasingly trying to reduce research and development expenses,R&D activities in low-cost countries such as India and China are gaining more global attention. Hence it is the need of the hour to strengthen our R&D base to meet the health needs not only of the nation but to be a leader in the global pharma industry, aver industry observers.
The pharmaceutical industries in the US and Europe are facing severe financial constraints which are expected to worsen in the years ahead. The pharma companies are under immense pressure to reduce expenditure due to the increasing cost of introducing New Molecular Entities (NME ) , tightening FDA regulatory issues, $100 billion worth blockbuster drugs getting expired by 2014 and drying pipelines of drugs under development.
“Internationally, new developmental pipelines from in-house R&D have been shrinking due to several factors such as complexity of therapeutic targets, falling R&D productivity, escalating costs associated with developing new products, greater regulatory hurdles and increasing challenges of managing innovation”, says a spokesperson of Sun Pharma.
With discovery research occupying close to one-third of the R&D expenditure for the western pharmaceutical industry, outsourcing to low-cost countries like India is becoming all the more necessary. “Formulation development capabilities, process chemistry expertise, state-of-the-art tertiary healthcare facilities, skilled work force and cheaper costs are the key factors that are working in India's favour as an R&D partner. According to some estimates the cost of doing R&D in India as a fraction of the cost in an advanced country. Also, India offers an edge in costs over other low cost countries such as China. While global R&D spend is about $60 billion, with a split of 1:2 in the non clinical to clinical spend, fully loaded cost of non-clinical operations in India is just a fraction of costs in the US and Western Europe and even lower for clinical operations” he adds.
India is also one of the fastest growing clinical research destinations with a growth rate of over 2.5 times than the overall global market growth. Indian companies have created strong base of R&D facilities which has attracted the attention of several multinationals. With low-cost manufacturing, high-quality research and manufacturing facilities and educated personnel, the Indian pharmaceutical industry presents both a competitive threat and partner opportunities.
While in the past, investment of Indian companies in drug R&D is 0.6 per cent of the turnover,presently, pharma companies are spending five per cent of turnover which increased 70 fold compared to 60s and 70s.
According to a Pharmabiz study, India's pharmaceutical sector has stepped up its R & D expenditure in a bid to capture a larger market share in highly regulated and emerging markets. The R&D expenditure of the top 25 pharma companies have thus increased by almost 17 per cent at Rs.3210 crore during 2008-09 from Rs 2,747 crore in the previous year, the study adds.
However in spite of exponential increase in R&D investment,the productivity of the pharmaceutical industry in delivering NMEs has been stagnating over the past decade. The basic problem is that the industry is actually not very innovative in translating invention and discovery from academics into commercial space. Its core model to discover and develop drugs has not changed in the last 30 years.
Despite the government encouragement for undertaking drug discovery by providing tax exemptions, sponsoring projects through CSIR, DBT, DST, there in not much development on the drug discovery front. Due to increasing cost of developing a new drug and risks involved in the process, companies are looking to mitigate risks involved. They are largely concentrating upon development of new dosage forms rather than on discovery of new drug molecules.
Manpower shortage and funding problems
One of the major challenges revolve around manpower and early stage funding. Pharma companies find a huge dearth of skilled resources in the critical areas of early stage drug discovery as compared to chemistry or analytical chemistry wherein the talent is easily available. Paucity of trained personnel often leads to rampant poaching from other companies.
In order to get such skilled persons in R&D department the education system should be made much more skill oriented rather than a mere theory oriented. It would be beneficial to develop a pool of R&D mangers who not only have formal training in management but also a good grasp of the drug discovery & development processes.
As regards funding,venture capital (VC) funding is limited in India. Most venture capitalists are unwilling to invest in biotech R&D. Rather, they want to fund companies whose products and markets are clearly identified or commercialization of technologies already developed.
Developing network
Drug discovery and development is a complex, multidisciplinary endeavour which require adequate infrastructure . For the Indian companies it would be difficult to create the entire infrastructure required for this purpose in-house. In order to solve this the Government must facilitate the establishment of common resources that can be used both by the academia and the industry.
Networking among research laboratories across various sectors such as industrial, academic and the government is essential to optimize research productivity. It is necessary to evolve a framework that will facilitate and promote such synergistic networking in India as in other grown up nations.
Govt should encourage industries to manufacture modern equipment that can be ancillary to the present pharmaceutical industries where employment potential can be generated and dependence can be minimized.
With India already being a leader in generic drugs having core strengths in R&D, and having skilled human resources and infrastructure, beefing up Open Source Drug Discovery (OSDD) programmes will give a boost to new drug discovery.
Intellectual property
Since companies do not have adequate professionally trained manpower to handle various aspects of intellectual property management,more training programmes must be initiated to develop a pool of trained IP personnel to cope with the rigours of the product patent era. It is also essential to build capabilities in patent strategy, patent audit, and handling legal issues relating to patent maintenance, interference and infringement.
Technology development
The country does not have any industry making modern equipment for new drug discovery process in order to make the nation self-sufficient. We are now mostly importing them from different countries that too at a limited extent because of the higher costs.
The advances in science & technology have made the drug discovery & development process highly sophisticated. Adopting and developing such technologies for drug discovery will be challenging for Indian companies mainly for reasons such as the cost of implementing these technologies and lack of skilled professionals. Indian companies may therefore plan their drug discovery programmes to leverage on the relatively less expensive approaches of drug discovery.
Coping with high failure rates
Chances for failure are very high in drug discovery and development .It takes about 10-12 years of R&D wherein 5,000-10,000 compounds are screened before a new drug reaches the market. According to some estimates, the cost of bringing a new drug to market is at $802 million. In India, roughly about one-third of the R&D cost is spent on discovery phase and the remaining two-third for development phase. Hence the Government must actively support the transition of the Indian pharma industry into a discovery-driven industry.
Stepping into newer areas
It is essential that the industries and academics to step more into the ‘omic’ era along with other countries. The ‘omic’ revolution has presented us with extraordinary opportunities for discovery of new drug targets and lead compounds. Emerging technologies like stem cell research, dendritic vaccines which are likely to be commercially exploitable in the near future should not be neglected.
In order to be more competitive, efforts should be focused in niche areas where in the coming years India can be a leader, like in the case of bulk drug production for the global generic markets.
Reducing time gap in approvals
Regulatory bodies should assist the industries in the process and reduce the time for approving a drug molecule like in European countries. The time taken for an IND approval in the US is one month whereas in India it is unpredictable. China became the first to approve the H1N1 vaccine but we have not initiated the trail at least. Strong co-ordination between industry, academics and regulatory authorities will help reduce the complexity in the process to some extent and encourage more companies to undertake the responsibility.
Evaluation of oriental systems
An objective evaluation of the oriental systems of medicine can aid R&D activities. .There is need to create a strong bridge between traditional systems of medicine and pharmacy particularly with the area of drug discovery. With the strong co-ordination between industry and academics, even medium scale companies should step into the drug discovery process utilizing classical methods.
Upgradation of quality of services
There is a serious need for upgrading the quality of services that research requires, such as quality of background and ongoing training for scientists and quality of goods and services from local or supplementary vendors. If India has to compete with developed markets for a share
of the research pie, a renewed focus on speed across the concerned areas will be required. Large capacities need to be built across the value chain in order to compete internationally. It is also necessary to have an improved supply chain for clinical research management.
Conclusion
Effectively tackling these challenges can bring about a radical change and a paradigm shift in the R&D activities and can ensure a dominant place for India among the leading countries engaged in all aspects of the pharmaceutical industry activities and in basic R&D for drug discovery . While the pace of the this transformation will depend upon deploying resources strategically and effectively, it can be accelerated by a combined effort of the government, academia and the industry.