The Indian pharmaceutical industry has made rapid strides since 1970 largely due to the revised patent law which permitted manufacturing & marketing of patented novel chemical entities by alternative, non-infringing processes. The industry might have, in all likelihood, evolved into a research-driven industry over time. However, the formation of the WTO in 1995 and the obligation of the member countries to comply with the TRIPS provisions has only hastened this business eventuality. Some of the progressive Indian companies pioneered this transition in the last decade by initiating drug discovery programs in-house. The effort of such enterprising companies has yielded some initial success. However, it is the effectiveness with which the Indian pharma industry copes with the challenges that it now faces that will determine the pace at which it evolves into a valuable source of new active substances for global consumption. This paper presents an overview of some of the challenges that the Industry must negotiate for effectively leveraging on this initial success to graduate to the next orbit.
Manpower
Drug discovery & development is a knowledge-based endeavour and availability of quality researchers is crucial for success. India traditionally has had a good base of scientific manpower. It is quite common for Indian researchers to relocate to the western countries in pursuit of higher education in science & technology and for better career prospects. According to an estimate by the Organization of Pharmaceutical Producers of India (OPPI) more than 15% of the scientists engaged in Pharmaceutical R&D in the U.S. are of Indian origin.
Current trends in the Indian scientific scenario are a cause for concern. While in 1950, 32% of the students who passed the higher secondary examination opted to pursue science while currently, the number stands at 15%. Last year, out of a proposed 25 Shyama Prasad Mukherjee scholarships for scientific research, CSIR could only award 4 scholarships for lack of suitable candidates. Similarly, DST was unable to award the Swarna Jayanti fellowships for young scientists last year for the same reason.
This dwindling interest in the pursuit of science and the consequent decline in quality might be attributed to lack of suitable career prospects in R&D on one hand and the emergence of attractive, alternative career options in other industries like the infotech industry on the other. Shortage of trained scientific manpower could become a serious bottleneck as more Indian companies make a foray into pharma R&D. this situation might become even more acute if the multi-national companies shift even a portion of their research effort to India to avail of the scientific capabilities and the cost advantages that the country has to offer. There is a need for collaborative, affirmative action by the Government, Academia and the Industry to stem this decline by revamping the academic course content and aligning it with Industry requirements, providing incentives for the pursuit of science and creating career opportunities.
Drug discovery & development is relatively new in the Indian context. There is a shortage of R&D managers capable of judiciously applying/adapting management techniques to reduce risk and enhance R&D productivity. 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.
Infrastructure
Drug discovery and development is a complex, multidisciplinary endeavour and adequate infrastructure is essential for this purpose. At this time, it will be extremely challenging for Indian companies to create the entire infrastructure required for this purpose in-house. The Government must facilitate the establishment of common resources that can be used both by the academia & the industry. This will avoid unnecessary duplication of resources and will provide ready access to those that need them. Biotech parks like the ones being set up at Hyderabad and Pune will greatly facilitate the creation of such infrastructure.
Animal Testing
It is mandatory to establish the safety & efficacy of experimental drug candidates in animals prior to clinical trials in humans. Until alternative validated approaches that are acceptable to regulatory authorities become available, we have little choice but to continue with animal testing. While it is good to have policies and regulations that govern the procurement, breeding, maintenance, and use of animal models it is vital to ensure that they do not become cumbersome. Delays in procurement or use of animal models arising from stringent procedures / policies may at best delay the preclinical development of a potential drug candidate. In other cases, they lead to loss of foreign exchange if companies choose to use the services of Contract Research Organizations (CROs) abroad to have these experiments performed. In the worst case however, they could lead to loss of valuable IP as drug discovery is highly competitive with research teams the world over vying to secure inventions through patents.
To ensure prompt preclinical evaluation of drug candidates, it is important to facilitate easy import of the necessary animal models for in-house research. Creation of state-of-the-art animal testing facilities will provide a good alternative for research organizations that are unable to establish such facilities in-house. Infact, the first national facility for transgenic & gene knockout mice was recently inaugurated at the Center for Cellular & MolecularBiology, Hyderabad with funding from Council for Scientific & Industrial Research (CSIR) and the Department of Science & Technology (DST). In addition, in-house animal ethics committees must be empowered to approve the use of animals on the basis of adequate scientific rationale. In order to monitor compliance with applicable policies and guidelines, annual activity reports may be requested by the CPCSEA from research organizations. Additionally, periodic audits at the research sites may also be undertaken.
Regulatory Environment / Clinical Development
The regulatory environment must provide a clear framework for operations; be it for the use of radiolabelled material for R&D, import of animal models/biological samples, clinical development etc. Currently, there are not many facilities in the country that can undertake custom radiolabelling of small organic molecules for R&D. A centralized resource might be created that will aid research organizations in sourcing radiolabelled chemicals for research. This would allow easy monitoring of the movement & use of such chemicals.
The Union Ministry of Health and Family Welfare is learnt to have decided to consult the Law Ministry prior to moving a proposal to dilute import regulations for biological samples into India by research institutions and the Industry. The existing rules require compliance with stringent formalities making it difficult for importing biological samples for further analysis and research. The simplification of these rules is expected to save tie as well as reduce the cost of research.
Clear guidelines are required for the proper conduct of clinical trials. Currently, schedule Y of the Drugs & Cosmetics Act deals with this subject. Recently, the central Government has put together drat rules governing medical research involving human subjects in the country. It is also proposed to have a Biomedical Regulatory Authority that will be responsible for the implementation of the new rules.
The revision of regulatory laws and guidelines must be done so as to harmonzie them with the internationally accepted laws/guidelines as far as possible. The success of the regulatory laws/guidelines will ultimately depend upon the ease of implementation on one hand and the ease of compliance on the other.
Intellectual Property
The future of a knowledge-based industry is contingent upon sustaining high levels of innovation and establishment of infrastructure required for protection and commercialization of the outcomes of such innovation. Strong Intellectual Property laws and the machinery to enforce them is a basic requirement in knowledge economies. In the absence of a strong legal framework, there would be little incentive for innovators to undertake R&D, leading to a gradual decline in competitiveness of the economy.
India is in the process of ushering in the product patent era by 2005 in compliance with the TRIPS provisions of the WTO. Even as the new laws are formulated, it is imperative that the supporting machinery be put in place as well. For instance, the patent offices in the country need to be strengthened both in terms of trained manpower and the resources required for managing the increased IP-related activities in future.
Recently, The Union Commerce Ministry has given clearance to appoint 165 new patient examiners in the four patent offices located at New Delhi, Kolkata, Mumbai and Chennai. Currently, these offices are said to have only 35 patent examiners and a backlog of as many as 42,000 patent applications.
The companies on the other hand do not have adequate professionally trained manpower to handle the various aspects of Intellectual Property Management. More training programs and academic programs must be initiated to develop a pool of trained IP personnel to cope with the rigors of the product patent era. Patent drafting and filing alone are not sufficient and it is imperative to build capabilities in patent strategy, patent audit, and handling legal issues relating to patent maintenance, interference & infringement.
Technology
The advances in science & technology have made the drug discovery & development process highly sophisticated. If genomics and proteomics-based approaches have the potential to yield novel drug targets, combinatorial chemistry & high throughput screening have enhanced the capability to shorten the time taken to discover lead compounds.
Adopting such technologies for drug discovery and development will be very challenging for Indian companies for two reasons. The cost of implementing these state-of-the-art technologies presently is beyond the reach of most companies. In addition, it will be difficult to find skilled professionals to develop and man theses technologies in India.
Indian pharma companies may therefore plan their drug discovery programs to leverage on the relatively less expensive approaches of drug discovery. For instance, the analog approach for discovering novel chemical entities will be guided by known validated targets and well recognized chemical scaffolds for which the clinical proof of principle is already established. However, as the discovery programs mature over time, companies must judiciously adopt new technologies for pursuing cutting-edge research. This is because; it is novel target based research that results in breakthrough therapies for the treatment of disease.
Government, Academia & Industry Networking
Networking among research laboratories across various sectors (industrial, academic and the government) has long been recognized as a valuable strategy to optimize research productivity. In the developed nations, this strategy has yielded high levels of sustained innovation. It is not uncommon to find the concentration of pharmaceutical companies in close proximity to academic centers of excellence. The industry draws from the basic research of the academia and translates them into treatment options with the Government facilitating this process. According to one estimate, in the year 1993-94, about 80% of the industrial patents (pharmaceutical) in the USA cited publicly funded research. There is a need to evolve frameworks that will facilitate and promote such synergistic networking in India as well.
Coping with high failure rates
Drug Discovery & Development is characterized by high failure rates. It takes 10-12 years of R&D wherein 5,000-10,000 compounds are screened before a new drug reaches the market. The most recent estimate by the Tuft's Center for the study of Drug Development (CSDD) pegs the cost of bringing a new drug to market at 802 million USD. Roughly, one-third of the R&D cost is spent on discovery phase and the remaining two-third for development phase. While drug discovery & development can be carried out in India at a fraction of the global cost, global clinical development will be just as expensive.
The ability of Indian companies to cushion the failures in the initial phases will be critical for evolving into discovery-led entities. The Government must support the companies undertaking genuine R&D by providing enhanced incentives (e.g. IT exemption on incomes from R&D) till such time as companies build deep pockets to withstand the rigors of pharma R&D. In addition, the Government must consider financing R&D projects possibly through the 150 crore R&D fund proposed in the Union budget 2000-01. In summary, the Government must actively support the transition of the Indian pharma industry into a discovery-driven industry. This is paramount considering the size of India's population.
According to a recent CII-McKinsey Healthcare study, the government spending on healthcare sector is expected to increase to about 6% of GDP by 2010 from he current 0.9%. Of this 2% is estimated to be spent on public health alone. If the Indian pharma industry is a source of new, patented medicines, the burden of maintaining the healthcare of the Indian population can be mitigated.
Conclusion
The changing business paradigms ushered in by globalization and liberalization over the last decade have prompted the Indian Pharmaceutical companies to revisit their strategies for sustenance & future growth. Some of the progressive Indian companies have chosen to venture into the challenging arena of drug discovery & development. Despite the various challenges that the Indian pharmaceutical industry faces in its effort to evolve into a research-driven industry, the current availability of scientific talent, cost advantages, large patient populations provide a unique competitive edge. Given the size of India's population, a self-reliant healthcare industry is critical to reduce the burden of maintaining its health. A major pre-requisite for such self-sufficiency is the steady transition of the Indian pharmaceutical industry into a strong, research-driven industry. While the pace of the this transformation will be contingent upon deploying resources strategically and effectively negotiating the current & future challenges; it can be catalyzed by a collaborative, resilient effort of the Government, Academia & the Industry.
-- Dr Venkateswarlu is director, Dr Reddy's Laboratories Ltd, while K Rajanikant Rau is Manager-Business Development, Discovery Research with the same company