The Indian pharmaceutical industry is strongly positioned in terms of production capacity and is also committed to growth
Representative image. Image Courtesy of Unsplash@hikendal
The Indian pharmaceutical industry currently ranks third in terms of pharmaceutical production by volume. This makes us a clear leader in the generic market. However, in terms of value, we are in 14th place. To move up the value chain and into the top 10 by 2030, we need to focus on pharmaceutical innovation, which accounts for 2/3 of the global pharmaceutical market value, and an innovation-driven pipeline of pharmaceuticals and solutions from the next generation to address the unmet needs of patients in India and around the world.
The Indian pharmaceutical industry is strongly positioned in terms of production capacity and is also committed to growth. Many of the larger companies have already increased their investment in the development of innovative medicines and could be further stimulated by government policies that incentivize their efforts through schemes such as production-linked incentives (PLI) and the upcoming research-linked incentive (RLI).
Even the small and medium-sized pharmaceutical companies can now upgrade their facilities to global manufacturing standards and unlock their innovation potential, supported by government programs that support technology upgrades, establish joint research facilities and wastewater treatment plants in pharmaceutical clusters.
Our industry is largely dependent on the import of proprietary drugs and critical raw materials such as Key Start Materials (KSMs) and Active Pharmaceutical Ingredients (APIs). We need to become self-sufficient and competitive in KSMs and APIs to drive the growth of this industry. The government’s PLI scheme aims to boost production and research of APIs and could provide a long-term solution to drug safety concerns in the rest of the world, which currently largely relies on Chinese stocks.
While the PLI scheme will largely help us grow in volume, the highly anticipated RLI is expected to enhance our innovation capability and move from a low-value high-volume to a high-value, high-volume player in the global pharmaceutical market.
A multifaceted approach to innovation
The R&D and clinical trials in the Indian pharmaceutical industry are traditionally risk averse as they face various obstacles that can stifle innovation such as complicated approval process, sketchy guidelines for new drug development and underpowered and understaffed regulatory bodies. Many of these are currently being addressed,
boosting the efficiency and competitiveness of the industry through a range of government initiatives such as RLIs, grants, subsidies and increased tax support for R&D, designed to stimulate investment in innovation.
Innovation in industry can be achieved through a multi-track approach involving not only such favorable policies, but also a stimulating regulatory ecosystem, robust financing, activating the links between industry and academia and providing high-quality infrastructure.
We need to build our appetite for venture capital to fund mid to late stage development, given the long gestation period and high failure rate typical of this sector. Currently, the average funding of the Indian pharmaceutical industry for research and innovation is 10 percent, about half that of the companies from the developed world. While this share must increase to meet global standards, the government, which primarily finances early innovation in drug discovery, must also increase the funding ceiling and extend the funding period from the current maximum.
Collaboration between industry and academia is an established global template for innovation and the pharmaceutical and biotech companies are aligned with the academic research ecosystem accordingly. AstraZeneca and the University of Cambridge, Novartis and Harvard/MIT, Amgen and the University of Ireland or Singapore Biopolis and NUS are some such strong examples. Collaborations like this in India can also attract talent from both digital and life science backgrounds and enhance capabilities across the industry value chain, from new drug development to
High-quality infrastructure is the key to innovation. The government has paved the way by facilitating the emergence of innovation incubators and we already have over a hundred of them boosting various start-ups. This incubator ecosystem is a prime opportunity for the Indian pharmaceutical companies to increase their product portfolio and pipeline, and therefore also becomes their responsibility to work with the government to improve infrastructure by improving the quality of the national labs and to increase possibilities for new types of testing methodologies.
Innovation can also thrive in a rationalized regulatory ecosystem with strong governance, procedural transparency and well-defined approval periods. Such a simplified but overarching regulatory system would facilitate ease of R&D and faster approvals.
Innovation in Indian pharma key to India’s growth story
Indian pharma contributes about 2 percent to India’s GDP and about 8 percent to our total goods exports. Our goal to become the global pharmaceutical market leader is highly dependent on meeting the global needs of patients and therefore large-scale innovation and production increase. During the recent pandemic, the government announced some incentives to accelerate innovation and fund development. Now is the time for the industry to go into mission mode to increase risk appetite and realize the collective ambition to reach $130 billion by 2030. This can only become a reality if industry and government synchronize their efforts to jointly become a global leader to significantly increase our GDP and give the make-in-India story a brilliant shine.
The author is Senior General Manager – Innovation, Bharat Serum & Vaccines Ltd. Opinions are personal.
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