Even as the research and development activities in pharma and biotechnology sectors in the western world has witnessed a decline due to various factors, research in these sectors in India has seen vast improvements in the past few years.
Today as India has emerged as a leader with low cost quality pharmaceutical products, many MNCs and foreign players are looking to invest in India especially in the R&D segment.
With the advent of global economic slowdown most of the bigger companies in the west have started cutting down on their clinical trial expenses. In contrast, as the patent of most of drugs are expiring the domestic companies in India have been investing in the development of copies of existing blockbusters, and rolling out similar generic drugs at very low costs.
While discussing the present pharma landscape across the globe, Satish Reddy, MD, Dr.Reddy’s, said, “There are tremendous opportunities in generics markets, by 2015, the emerging markets like India, China and other developing countries are poised to capture 28 per cent of global markets from the developed markets like US, Japan and European Union whose stake will be reduced by 20 per cent from the existing 78 per cent at present.”
If one looks at pharma industry in India, it has made phenomenal progress since 1994-95. Over the years it had evolved and today it has become a reliable source of quality medicines at affordable prices. With over US$ 12 billion in domestic sales and another US$ 12 billion in exports in 2010, India has shown a remarkable growth.
Contract research manufacturing is another important area where India is opted as the destination of choice for the foreign companies. Today the country enjoys the comparative advantage on cost competitiveness, abundance of technical scientific manpower and large pool of genetically diverse and drug-naïve patients. From the R&D perspective, many multinational companies wants to take advantage of the available environment in the country and are now looking to set up R&D centres and collaborating with public and private firms. Many MNCs are partnering and collaborating with the Indian pharma players in the R&D sector.
Rise of Indian R&D
With the advent of liberalization and globalization since 1994 the R&D and bulk drug manufacturing sector has shown an exponential rise. Today the industry is manufacturing practically the entire range of the therapeutic products. It is capable of producing raw materials for the manufacture of a wide range of bulk drugs from the basic stage and a range of pharma machinery and equipment.
Today the Indian industry has achieved global recognition as a low cost producer of quality bulk drugs and formulations. Leading Indian companies have established marketing, manufacturing and R&D activities in over 60 countries including USA and Western Europe.
“In spite of heavy regulatory norms, complexities and other challenges, today India presents lucrative opportunities for international companies across the entire value chain right from discovery R&D to clinical research to manufacturing. The industry’s performance is proved by unimaginable export growth rates,” said Dr. P.V. Appaji, Director General Pharmexcil.
The research and development expenditure of the Indian pharmaceutical industry was just Rs.30 million in the year 1965-66. From there it rose to Rs.1400 million during the year 1994-95. In the next two to three years from there on the R & D expenditure of the country was doubled and touched Rs.2, 200 millions with a growth of 57 per cent. This growth in R&D was mainly attributed to liberalized economic policies of the country.
The year 1994-95 was the turning point for the industry due to the advent of the WTO. The industry has since sought to reorient itself from looking inwards to being a player in the global arena. The thrust on R&D by the Indian pharmaceutical industry is reflected by the increased proportion of R&D expenditure in both investment and turnover.
Prior to 1990’s investment in R&D by industry as a whole in India had been low. Only around 0.6 per cent of the turnover was spent on the research and development. In the Indian pharmaceutical industry the average R&D expenditure was around just two per cent of the turnover contributed by around 150 companies.
The low investment in R&D is due to the low levels of profitability and comparatively small size of the companies. However, the scenario is now changing. Some pharma companies now spend nearly five per cent of their turnover on R&D. In addition to R&D in industry, substantial pharma related R&D is carried out in publicly funded research organizations, mainly by the laboratories of Council of Scientific & Industrial Research (CSIR), Indian Council of Medical Research (ICMR), around 25 universities and a few pharmacy colleges.
Some of the new R&D units in industry and a few of the publicly funded laboratories are equipped with sophisticated laboratory equipment, instruments and pilot plant facilities. The R&D manpower is generally highly qualified and proficient in conventional techniques of pharmaceutical R&D.
Dr. Sadhna Srivastav, Scientist D, ICMR, said, “India is having some of the finest research and development institutes which are developing lost cost vaccines, generic medicines and other herbal and ayurvedic medicines in the country. During the times of epidemic outbreaks , these institutes have supplied large-scale vaccines and medicines for very low costs to the government. Institutes like ICMR, NIVR (National institute of Virology) VCRC (vector control research centre), NICED (National institute of cholera and enteric diseases), National institute of Malaria Research (NIMR), and Tuberculosis research Center (TBC) have played key roles in developing vaccines and eradicating various communicable diseases in the country. Similarly Institute of Cytology and preventive oncology (ICPO), Desert Medicine Research Centre (DMRC) are carrying out research to discover drugs and vaccines for non-communicable diseases. The government should fund these institutes for more innovative research rather than relying totally on the private sector.”
Hitherto, R&D was largely concentrated on process development for known bulk drugs albeit through novel and innovative process routes, invariably substituting for expensive imported raw materials enhancing the productivity and efficiency of the processes, besides research on formulations and known drug delivery systems. India’s R&D forte has been in synthetic organic chemistry and process development. A few new drugs, using conventional screening techniques, have emerged from the Indian R&D.
The flow of foreign R&D is mainly concentrated in few areas. Not much R&D is being pursued in traditional systems of medicine. Even the limited R&D is concentrated on standardization of raw materials and final products. A few companies are now using modern scientific methods and limited biological screening as well as toxicity studies for validation of formulations.
Govt effort to boost industry
During the past one decade, the government of India has been striving to boost the pharmaceutical and biotechnology industry in the country. For this purpose it has adopted aggressive and prudent strategies to develop the industry keeping in view the future needs of healthcare sector. The government has granted 100 per cent Foreign Direct Investment (FDI) in the drugs and pharma sector and established various pharma SEZs across the country. It has taken a range of initiatives to further strengthen the Indian pharma industry. Government of India and the state governments are also providing incentives to encourage investment in the pharma sector.
In the year 2010 , the central government had announced its plans to set up a $639.56-million venture capital (VC) fund to give impetus to drug discovery and strengthen the pharma infrastructure. Both domestic and MNC pharma players are expected to leverage these initiatives to expand their operations in the country.
With a view to have a long-term pharmaceutical strategy, the Department of Pharmaceuticals has prepared “Pharma Vision 2020.” The main aim of this vision is to make India one of the leading destinations for end-to-end drug discovery and innovation.
The other objectives of the vision 2020 would be to build world class infrastructure for talent and research, encourage public-private partnership, and encourage financial incentives for innovative activities and to shape a favourable regulatory frame work for doing research and development.
On the whole by 2020 the government is aiming to place India among the top five pharma innovation hubs in the world with one out of every 5-10 drugs discovered originating from India.