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Recession pill may turn India an R&D hub
Nandita Vijay, Bangalore | Thursday, April 16, 2009, 08:00 Hrs  [IST]

The economic downturn, which coerced the developed countries like USA to take stringent steps to ensure an affordable drugs era by embracing generics drugs and boosting generics research and development (R&D) activities, has in fact increased India's chances to emerge as a sought after locale for conducting pharma and biotech research and development activities.

For instance, the Obama government in USA in its efforts to cut healthcare costs is reportedly supporting generic manufacturers over innovative pharma companies and is giving the new drug R&D based firms a difficult time in releasing research funds. Such a change in the landscape of new drug R&D is expected to favour low cost destinations like India.

"The scene for research is positive, despite the economic slow down. Although the current tough market condition is leading companies to cut costs, in such a scenario India as a destination for outsourced R&D cannot be ignored. It makes more business sense to look at India because of its economies-of-scale. There is both skilled scientific personnel and cost advantage. Therefore, recession phase could be either an opportunity to get business, if international pharma decides to go ahead with the existing projects, or lose it, if international pharma backtracks on existing projects," said, Shrikumar Suryanarayan, director general, Association of Biotechnology Led Entrepreneurs (ABLE).

"Fundamentally when there is pressure on companies to reduce costs and specifically R&D costs, there are two ways of addressing it. One is to stop the project and the other is to scout for a cost-effective location to carry out the research. In such a case, India will prove to be an ideal destination for research outsourcing, because it is a value-added strategy for international companies. Therefore, one could see partnerships, alliances, mergers or even acquisitions with Indian companies in R&D," he added.

There is no doubt that the current economic slump has done its bit to slow down the innovative drug R&D in the pharmaceutical and biotechnology industries, worldwide. It doesn't however mean that the industry players have completely given up their new drug R&D efforts. But, slowdown has certainly changed the face of research.

"The economic slump has changed the face of research. Companies need to cautiously tread on the research path. Generics and biosimilars are gaining ground and for the first time the US government is expected to table a bill to promote the research of such products. The need for a formal legislation was mandatory because of the significant contribution made by biosimilars prescription in all international markets," said, Dr. Harish Iyer, head, R&D, Biocon Ltd.

International research and development efforts in the pharma and biotech space are witnessing major transformation as companies frame plans to focus on generics and biosimilars. The Big Pharma's recent biotech acquisition spree and their efforts to strengthen generics grip underscore the changing scenario in pharma-biotech R&D front.

Given the fact that generics and biosimilars are sure-shots compared to novel innovative compounds, which are highly risky, the global pharma is looking to exploit this front in this troubled economic times to make sure returns for the investments they make. However, this trend like all probability may fade out soon once the global economy recovers from the current downturn, as innovative new drug R&D is the lifeblood of pharma industry. But, at present pharma and biotech industries are under the grip of economic slump.

"The pharmaceutical and biotech research has no doubt slowed down due to global recession. However, most pharma research has short term and long term goals. The long term goals perhaps have been postponed and the short term goals are continuing albeit at a slower pace. In any case, there is a slow down in recruitments and reduced pay packets in pharma industry similar to many other industries," apprised Prof Paturu Kondaiah, associate professor, department of molecular reproduction, development and genetics, Indian Institute of Science.

TRENDS IN R&D SPACE
The focus of R&D is on novel molecules in the area of cancer, diabetes, rheumatoid arthritis, cardiovascular disorders and nephrology. Hence research concentrates on insulins, erythropoetins, interferon betas, growth colony stimulating factors, interferon alphas and growth hormones.

"With new funding opportunities available from agencies such as DBT for R&D, many biotech-pharma companies have started applying for research grants/low interest loans. Hopefully this should spur industrial R&D and generate employment for young graduates," said, Dr Pundi Narasimhan Rangarajan, associate professor, department of biochemistry, Indian Institute of Science, Bangalore.

RESEARCH DRIVERS
Innovation, IPR creation and public-private partnerships are expected to drive new drug R&D activities in the future. "Innovation and cost effective drugs are the future of the drug industry," said Dr Iyer.

The future biotech-pharma research would be driven by novel research in vaccines and biologics. Biotechnology, through the development of biologics, especially vaccines and therapeutics, has the ability to address diseases of the future.

"Globally there has been a concerted focus on increasing the biotech exposure by several pharma companies. Multinational pharmaceutical companies that were solely focused on chemistry based drugs are waking up to the fact that the majority of new molecules would be biotech based," informed Dr Ella.

Most R&D in pharma industry is on to develop targeted therapies in cancer and neurodegenerative diseases. Vaccine development against several infectious agents is another area that may catch up in the future.

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