Senior Research Analyst, Healthcare Practice, Frost & Sullivan, India
Why do you think PPPs are necessary in the current scenario?
The global pharmaceutical industry is in the middle of a pipeline crisis. The number of incidences of approved drugs being withdrawn from the market and the molecules from development is increasing. Added to this, the looming loss of revenue from a number of blockbuster drugs going off patent in the next few years has put a lot of pressure on global pharma companies to come up with novel drugs which are safe and can meet regulatory requirements. Indian companies which till recently were not under pressure to innovate too have been forced to go down the challenging path of drug discovery and development thanks to the TRIPS agreement. One way of overcoming these issues is through collaborations and partnerships. Partnerships with both private companies and public funded institutions i.e. PPPs is being seen as an effective strategy to reduce pipeline stress and also keep the spiralling cost of drug discovery and development under control.
What promise does the Public Private Partnership model hold for the industry today?
PPP is one of the ways in which industry can tap into the vast knowledge base that has been generated by these institutions in basic sciences. Today it is acknowledged that in order to make effective and safe drugs we need to apply basic biology knowledge to the process of drug development. This knowledge is mainly found in academia and the scientists and researchers from these institutions are well placed to apply this knowledge to the drug discovery and development process. Genomics, Proteomics and Systems Biology knowledge are increasingly being used in today’s drug and diagnostic development. But the expertise for this type of high-end basic research lies with academic research institutes. Scientists in private companies have the ability to apply this basic research into developing novel products and services.
How does the academia, usually seen as a not-for-profit entity, gain by working with the industry?
The central theme for academic research may be not-for-profit, but if there is an invention or a discovery that has potential to generate revenues, scientists and academicians do not shy away from this additional source of revenue. This revenue is split between the individual researcher and the institute which in turn makes use of this revenue to improve facilities or fund future projects.
Also, Research Institutes around the world have been sometimes been criticised for not applying some of their scientific inventions and discoveries for the benefit of common people, this when most of the funding for such institutes comes from public money. By collaborating with private companies which have a product or service-focussed approach, academia can help translate basic research into applied products and services.
What are the prerequisites for a successful adoption and use of the Public Private Partnership model?
One of the most important prerequisites for a successful PPP is a proper due diligence process in order to confirm the mutual benefits of the cooperation. The objectives of the cooperation have to be clearly communicated between the partners. Both parties should be committed to dedicate time and resources for the project. The project for which the PPP model is being utilised has to be commercially feasible. An effective mechanism has to be agreed upon by the two parties on the commercialisation of IP generated from the partnership.
Steps should be taken to maintain confidentiality of the data generated. These steps should be worked out in consultation with both parties and has to be agreed upon before the partnership can take off.
With the focus of the industry shifting towards improving efficiencies and developing innovative drugs, can the industry and academia achieve their goals working together?
Public Private Partnership (PPP) in the pharmaceutical space allows companies to leverage the knowledge and capabilities present within the institutes to rekindle their product basket; for the research institute, this offers the benefit of commercialisation of novel inventions or processes that have the potential to generate additional revenues for both researcher and institute.
Do you think the industry in the emerging markets and especially in a country like India is very conservative in working with the public institutions?
Indian industry is definitely not conservative in working with public institutions. The number of PPPs have been increasing over the years. The PPP process got a big boost after India became signatory to TRIPs. There have been a number of government schemes that have been set up to encourage PPP. But then the number of PPPs in India is still on the low side and more efforts are needed to encourage and nurture PPPs.
Is the time right for this model to be tried out in India?
The Indian pharmaceutical industry has always been geared towards producing low-cost products and services. This can be attributed to the limited resource availability which forced the government in the 1970s to encourage process innovation rather than product innovation. While such a policy has helped India gain centre stage in the global generic industry, this policy had its pitfalls: it led to a complacent attitude towards developing innovative products.
The R&D programmes of most Indian companies are funded by the money generated through the generics business of these companies. But the generics business has been facing severe pricing pressure reducing the amount of profit generated from this business and hence the business may not be sustainable over the long run. A lack of funding is restricting the drug discovery and development work of these companies. Considering the situation industry is facing right now, more collaboration with academic institutions should be the way to go.
Joseph Manoj Victor works as a Senior Research Analyst with the Pharmaceutical and Biotech practice in Frost & Sullivan India.