Three R&D centres of multinational companies have been shut down in Karnataka and have been shifted to their global headquarters, thanks largely to the global slowdown, slashing budgets for research and disappearance of blockbuster drugs. The centre are Accelrys, a subsidiary of Pharmacopeia Inc., Actavis and UK’s AstraZeneca Avishkar research and development unit.

While pharma experts view such moves as a serious blow to the Indian research acumen, others opined that partnerships with small research outfits for multinational companies (MNCs) is the future strategy.

The key reasons for these shut downs are global slowdown, slashing budgets for research, disappearance of blockbuster drugs, drying up of the drug pipeline primarily because of shift from treatment to prevention, linear phase of research giving way to out licensing and the emergence of a large potential for R&D outsourcing, said R&D personnel who were earlier employed in MNCs.

Current market dynamics are creating a platform for the emergence of scientist-entrepreneur driven integrated small research. MNCs are viewing the skills and scientific talent available in such small research companies like Connexious Life Sciences or a Gangagen Biotechnologies which are scientist-entrepreneur driven, said corporate heads who did not want to be named.

The total dependence on the parent company located abroad is cited as the primary reason for the closures of Accelrys and Actavis. There is constant lack of communication, no response to the Indian employee’s inputs which created a perpetual jittery work environment. The closure of Accelrys in India in 2007 was a warning to many global pharma-biotech research units in the country and the next to follow was Actavis which set up an advanced laboratory for active pharmaceutical ingredient (API) research investing Euro 2 million. There were 60 scientists working here. The unit was amongst its largest globally developing chemical molecules going off patent. But the company walked out of India, stated R&D experts who were observing these developments.

The AstraZeneca move is a serious setback to India’s image as a preferred destination for drug development by big pharma. Although the closure is a painful decision, it needs total introspection of the business strategy. Such developments may affect other global companies’ efforts to establish such facilities in India. AstraZeneca being a company of repute worldwide, must have plans to support the retrenchment or help relocate its technical staff by identifying the proper placement, points out Kaushik Desai, immediate past chairman, Industrial Pharmacy Division, Indian Pharmaceutical Association (IPA).

According to AG Raghu, pharma consultant, Santhana Gopala Consultants, this is a strategic decision by AstraZeneca to shift their research to core therapy areas and at outsourcing. It may not have anything to do with a region or country. The impending job loss is manifested not just in pharma but every industry. However, the displaced scientific personnel could easily seek greener pastures because India is a key location for global manufacturing and research, mainly for APIs.

“Global pharma is forced to embark on such exercise because of cost cutting”, noted Jatish N Seth, president, Karnataka Drugs & Pharmaceutical Manufacturing Association, vice chairman Confederation of Indian Pharmaceutical Industry and director, Srushti Pharma.

According to Dr BR Jagashetty, former Karnataka drugs controller, the AstraZeneca R&D closure is seen to jeopardize the state’s image which is known for its science talent and leading research centres. This is where the state government should look to implement its  Pharmaceutical Policy at the earliest. In fact, Karnataka is the first state to unveil a Pharmaceutical Policy. There is conducive environment for R&D in Karnataka, as the government promoted it by providing an annual grant of Rs. 50 lakh towards hardcore research activities.