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India can take centre-stage in drug development: Expert
Y V Phani Raj, Hyderabad | Thursday, March 24, 2005, 08:00 Hrs  [IST]

Pharma companies are caught in a high investment low output situation worldwide. There are multiple reasons that are responsible for the shift in the R & D output. The stricter controls requiring more intensive trials are increasing the time to market, which in turn has increased R & D investment, and this has lead companies reduce their quantum of research, which further lead to the reduction of number of new product launches and ultimately has affected the growth of the industry.

Alan Levin, Pfizer Global R & D, addressing a gathering at Bio Asia 205 held at Hyderabad recently, said, thirty one new drugs were launched in 2000 and the number of new drugs has reduced to 14 in the year 2003. Referring to an EIU survey of 104 senior executives conducted during September 2004, he said, the survey indicated that 70 per cent of companies have already employed R & D talent overseas, 52 per cent of executives plan to increase their investments in overseas research in the next three years.

The survey also indicated that larger investments are planned in China than anywhere else, India also emerged as hugely attractive destination for R & D spending. The major factors that made China and India as potential R & D hubs are the ability to attract the best local talent, quality of education system, protection of intellectual property and the size of local market. There has been a constant rise in the outward R & D investment from the US.

The US companies have invested about $ 7450 million in 1994 in Europe which raised to $ 12,300 million in 2000, investments in Canada alone were up to $ 800 million in 1994 which increased to $ 1800 million during 2000, Japan accounted to $ 700 million in 1994 and $ 1200 million in 2000 and China attracted investments up to $ 5 million in 1994 and jumped to $ 506 million in 2000.

The countries that were preferred for R & D investments in the next three years in the survey are- China (39 per cent), US (29 per cent), India (28 per cent), UK (24 per cent).

He added, India can take a centre-stage in drug development but one should know that the cost advantage will narrow over time.

India needs diverse skill-sets such as entrepreneurial energy, managerial capacity, venture capital, supporting infrastructure and an enlightened pro-innovation policy climate, he opined. China is attracting far more FDI than India currently with its much-friendlier investment regulatory environment, Singapore is moving aggressively to attract research talent and Eastern Europe is increasingly seen as an attractive R&D destination.

The major road blocks for India are- IP regime currently not seen to be strong with ambiguity on patentability, compulsory licensing and data exclusivity; regulatory hurdles such as restrictions on Phase I studies, adoption of GCP and other global, ethical standards, regulatory capacity and expertise; weak and genericised pharmaceutical market; insufficient capacity and medical infrastructure.

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