Indian Pharmaceutical Industry

The pharmaceutical industry in India is on the cusp of a great opportunity-the opportunity to innovate and create novel medicines to meet unmet medical needs of today and the future, thus making a positive impact on global health. It is imperative to capitalise on the enormous wealth of creative and scientific resources that our country has been blessed with for the benefit of the patient by discovering medicines for unmet medical needs.

As we go forward, India is tipped to become a pivotal player in the global economy and the country's pharmaceutical industry stands on firm ground both as a provider of authorised generic drugs as well as the seat of pharmaceutical research. This position however is only attainable if India aggressively nurtures innovation and is seen as a country that respects intellectual property rights while tackling the twin issues of health and education.

Newer, more effective products at lower costs
The pharmaceutical industry is under growing pressure from multiple stakeholders to keep delivering blockbuster products providing fair return to investors while at the same time ensuring that prices are affordable. Currently, it takes at least eight to ten years to bring a compound from an idea to a usable medicine. During that time, pharmaceutical companies spend up to US$ 1 to 1.7 billion in researching, developing and testing to create a single drug. Sources show that while US$ 100 billion worth of drugs will be going off patent by 2010, clinical development time has actually doubled since 1982 to an average high of 68 months.

Boxed in as it is from all corners, pharmaceutical companies have to rely on their innate skills to deliver products that meet not only the medical needs of today but also that of the future. While doing so, pharmaceutical companies need to keep a keen eye on research costs and look at the various avenues to partner with others so as to deliver newer and more effective products at lower costs.

India on its way to become a pharmaceutical powerhouse
Looking back at history, much of the progress of civilisation in various fields including mathematics, physics, chemistry, astronomy, medical science and the arts can be attributed to India. There is ample evidence to show that various kinds of surgeries including plastic surgery, ophthalmic surgery and dental surgery were being done in India long before they were even known in other parts of the world.

The world has long since changed and India has lost ground relative to some other economies in the area of pharmaceutical innovation. However, today the world has moved to become a knowledge economy and India with its vast intellectual capital has an advantage over many other nations. With a prodigious knowledge pool, expertise in process chemistry and proven leadership in IT, India has all the ingredients necessary to become a developed country in the pharmaceutical field. In addition, the pharmaceutical industry is a mature industry with a strong manufacturing base. It is also well developed as an ancillary industry and has the technological capability to manufacture Active Pharmaceutical Ingredients (APIs). India has the largest number of US FDA approved plants outside the US and the recent development of the US FDA setting up a base in India is of great significance for the country and her capabilities. Besides being a net foreign exchange earner, the pharmaceutical industry has shown skills in being cost-competitive throughout the value chain. Above all, India has the third largest English-speaking scientific and technical manpower in the world and its people have shown significant entrepreneurial spirit. The industry has a well-deserved reputation for producing low cost / high quality medicines.

Need for world-class IPR
As the world ushered in the New Year on January 01, 2005, India ushered in product patents. However, there were no fireworks to mark the defining moment of the Indian pharmaceutical industry.

With the advent of a new era in product patent law, the Indian pharmaceutical industry began the important shift toward research and development. Leading research-based Indian pharmaceutical companies spend less than 10 per cent of their sales on research. While this figure seems abysmally low as compared to what the large pharmaceuticals companies of the world spend, it is a good beginning. However, the law needs to see some changes before the Indian pharmaceutical industry can be called truly world-class.

The law as it stands today does not recognise incremental innovation or innovation in sequential steps. It is important to recognise the tremendous value that incremental innovation has made to the progress of modern science. It is in the interest of overall public health for India to allow patents for incremental innovation. Breakthrough innovations in all fields are rarer than we imagine. The invention of the wheel was a breakthrough innovation in transportation. What came later by way of the bicycle where two wheels, pedals and gears were put together, completely revolutionised the way people travelled over land and practically did away with horse-drawn transportation. The discovery of the steam engine offered transport an alternative source of power. Once a suitable gas-powered engine was perfected, this innovation replaced the earlier steam engine, creating the first automobile and changing the way people and goods were transported.

At no time in this process of invention did an innovator go back to the drawing board to reinvent the wheel. What an innovator did do was build on the existing knowledge base and by using additional creative thinking and going through a process of further research and trials so that he could come up with a better and more efficient means of transport. One base technology-the wheel-has been continuously modified to make transportation as we know it today.

If drug discovery is perforce required to go back to the drawing board in its quest for new medicines, the kind of time and money that would be required would not only be mind-boggling but would also significantly delay the delivery of new medicines to patients. As a global pandemic becomes a reality, biological weapons become a threat and preventable diseases continue to take lives, we should work to shorten the amount of time it takes to bring a product to market, not unnecessarily lengthen it.

From improving a medicine's safety and side-effect profile to finding a solution for unmet medical needs and increasing a country's productivity, incremental innovation provides exceptional value for patients and society. Over 70 per cent of medicines on the market today are the result of incremental improvements on a base molecule.

The central role played by incremental innovation in medical progress must be recognised and failing to do so would mean a disregard for the way in which healthcare has progressed. Granting patents to incremental innovations is critical for India to not only encourage national pharmaceutical companies to increase their research focus but also to ultimately bring better medicines to the people of India

It must be stated that incremental innovation is not "evergreening" which is an attempt to extend patent protection for a product by making minute changes to a drug just before patent expiry. Changes made for evergreening purposes do not represent medical advancement and often do not bring additional therapeutic benefits while changes made to convert a compound into a better medicine provide clinical efficacy and exceptional value for patients and society.

Patients are the ultimate beneficiaries of pharmaceutical research and development. An important part of the research and development jigsaw is data gathering on the safety and effectiveness of drugs. Lack of data protection, an integral part of intellectual property rights, acts as a barrier to research. Pharmaceutical companies generate significant amounts of data while conducting research and this data goes to government by way of a dossier while seeking marketing approval for a new drug. Unfortunately, this data is used by makers of generic drugs in India to get regulatory approval for their medicines without conducting clinical trials. There is a fear, unsubstantiated I might add, that protecting this data will lead to higher drug prices. There is no reason to believe this as history shows that there is no correlation between data protection and the pricing of drugs. Data protection exists in many countries including China, Egypt, Mexico, Columbia, Korea, Brazil and Taiwan for a period ranging from 5 to 6 years. Market forces including limitations of purchasing power help keep prices down.

Innovation nurtures creativity and productivity
Investments to grow our capacity for research and to create intellectual capital in the pharmaceutical space will not help if we as a country refuse to respect intellectual property rights.

Indian pharmaceutical companies must be geared to nurture innovation as it leads to greater productivity, higher economic growth and better standards of living. There are various ways to achieve this including public funding of research, collaboration with academia, funding via surpluses of large corporations involved in traditional businesses, venture capital funding and the like.

Our country has a glorious past and there is every reason to believe we can achieve in pharma what we have managed to achieve in IT. A strong patent regime will instill confidence in innovation, research and creativity in global and national companies operating in India and encourage them to increase investments in the country, especially in pharmaceutical research and enter into partnerships where appropriate.

As eminent scientist and Director General of the Council of Scientific and Industrial Research (CSIR), India, Dr. R A Mashelkar said not long ago, "the process of globalisation, corporatisation and privatisation of research has shifted the dynamics of knowledge production and dissemination dramatically just as issues of Intellectual Property Rights (IPR) and proprietary information and knowledge have begun to open up new dialogues on public good versus private profit. New models of the innovation chain and new paradigms of the science-society contracts have begun to emerge."

It is heartening to know that India actually has the highest intellectual capital available per dollar anywhere in the world. In fact a publication of the standing of The Far Eastern Economic Review had remarked that India ranked number one as the source of knowledge workers-ahead of all other countries in Asia including China, Japan and Singapore. CSIR to date has 302 patents in the field of medicine alone. In chemistry it has 1799 patents, 221 in biological science, 90 patents in analytical techniques.

Estimates indicate that it costs over US$ 1.2 billion to get a single New Chemical Entity (NCE) into the market. Multinationals can outsource much of their R&D clinical activity to India lowering their overall costs. Conducting preclinical and clinical trials in India has three-fold advantages. Firstly, the cost of such trials in India would be in the range of 30 to 50 per cent of costs in the US and EU. Secondly, India has huge genetically diverse patient pools who are "drug na?ve", not having taken any drugs for their condition. Thirdly, the country has a significant number of qualified doctors who have the expertise to conduct and supervise clinical trials as per global standards. And it is not just in the area of clinical trials that India has fair opportunity to be a strategic partner but also in the areas of contract manufacturing, custom synthesis, biostatistics, bioinformatics and technical services among others.

Partnering to win
Collaborations will be the way forward and are a win-win situation offering Indian companies an opportunity to tap into the world's largest global research networks and providing access to new technologies. The industry also serves as a platform for Big Pharma to tap into the huge scientific talent available in India.

India has the potential of becoming a hub for drug discovery programmes. While there are some concerns with regard to IPR particularly with regard to enforcement and these clearly continue, the framework is in place. An environment where innovation and research are encouraged will only serve to raise the level of interest in the country as an investment destination.

There is therefore little doubt that as time moves on, India will quickly emerge as a leader in the world pharmaceutical market. Will the 21st century belong to India? Will India, the land of milk and honey, go back to realising as in ancient times that "Prajnam Brahma" or Knowledge is God? Why not? I have every reason to believe it will.