Indian Pharma Industry - Need for Innovation Focus

What is the issue?

Despite being a leading player, the Indian pharma industry needs a relook in the age of innovation and emerging challenges.

How significant is the Indian pharma industry?

• Leads in the global generic world.
• Indian pharmaceutical market is estimated at $40 billion.
• Pharma companies export another $20 billion.

What are the shortcomings?

India has more than 30% share in the global generic market but less than 1% share in the new molecular entity space.

• India’s pharma industry is just a miniscule portion of the $1.27-trillion global pharmaceutical market.
• It ranks third worldwide for pharmaceutical production by volume, but only 14th by value.
• India is only the 12th largest exporter of medical goods.

What are the priorities now?

• Changing perspective and increasing the use of technology.
• Going beyond generics.
• Focusing on innovation.
• Creating and developing breakthrough products for Indian pharma companies to have a dominant global presence.

How significant is innovation in pharma industry?

• Bring new solutions to unmet healthcare needs.
• Reduction in disease burden through development of drugs for India-specific concerns like TB and leprosy.
• Creation of new high-skilled jobs.
• Facilitate probably around $10 billion of additional exports from 2030.
• Create a source of sustainable revenues.
• Stay relevant in the global pharmaceutical space. Countries like China have already leapfrogged ahead, skipping the generic chapter altogether.

What are the limitations?

• Complex and delayed approval processes - Nod for development of new drugs in India takes 33-63 months versus 11-18 months in developed countries.
• Lack of robust process guidelines - Indian websites list 24 guidelines compared to over 600 at the U.S. Food and Drug Administration.
• Lack of transparency - The US has an established pre-submission process and a time bound stage-gate process.
• Inadequate capacity/capability across regulatory bodies in India.
• Limited governance - Indian authorities currently only track the number of applications and approvals.
• Limited innovation mindset - India is risk averse compared to most global bodies. E.g., in the approval of clinical trials.

What are the measures to be taken?

• An enabling regulatory structure with simplified processes, robust guidelines, predictability, increased capacity and strong governance. India needs a 60% reduction in the approval timeline to be competitive.
• Funding support through policies/incentives, direct government investment, and significant Private Equity/Venture Capital investment.
• [The ‘Make in India’ campaign has played a small positive role in this regard.]
• Offering an attractive set of benefits for countries looking for innovation - Weighted R&D deduction, additional patent box benefits, progressive policies to increase innovation funding.
• Strong linkages between academia and industry, industry-oriented research.
• E.g., The US created the Bayh-Dole Act encouraging academics to set up independent companies.
• World-class centres of excellence to attract global talent and support cutting-edge research.
• A favourable policy landscape across research, technology commercialization and Intellectual Property.
• Innovation hubs to accelerate collaboration - Co-locating academia, public R&D centres, industry, start-ups and incubators.
• Policy support by way of R&D tax breaks, patent law tweaks and research talent.

Source: Business Line