The Indian pharmaceutical industry, often referred to as the ‘pharmacy of the world’, is the third largest in volume and the thirteenth largest in value. However, there is some danger of losing the ‘pharmacy of the world’ tag as the Indian drug industry is increasingly becoming dependent on China for supply of bulk drugs and intermediaries. It is common knowledge that India is the largest provider of generic drugs globally, and the USA is its key market. In addition to having the second largest number of USFDA-approved manufacturing plants outside the USA, India also offers very low labour costs and cheaper cost of production in comparison to Western countries. It is predicted that the pharmaceutical sector is expected to grow to USD 100 billion by 2025. These figures indicate a prosperous path ahead for this sector in India. But, most of the current success is due to the generic manufacturers. India is not a pharmaceutical hub for discovery of new ‘medicines’, though we are now witnessing a slow and gradual shift towards innovation.
Indian Pharmaceutical Sector – Innovation
It would be unfair to say that there is a lack of innovation in the pharmaceutical sector. Indian companies have previously relied on its skilled workforce to innovate by way of ‘designing around’ patents, thus preventing infringement in the pre-TRIPS era. They manufactured cheaper generic medicines which were exported globally and earned India the ‘pharmacy of the world’ tag. Nonetheless, these companies have finally realized that future industrial growth would come only from new ‘drug discovery’ and are taking steps towards research and drug discovery.
The amount of R&D expenditure by Indian pharmaceutical companies has increased twofold from 4% to 8-10% over the years. Slowly and steadily, leading organizations like Dr. Reddy’s Laboratories, Cipla, Lupin Ltd., Biocon Ltd., and Sun Pharma are bringing about a change in the industry by moving into the ‘drug discovery’ business. Top Indian patent filers such as Cadila Healthcare, Dr. Reddy’s, Cipla, Sun Pharma, Wockhardt and Lupin are innovating as evident from their 100+ drugs in discovery phase and a sizeable drug pipeline.
Further, Indian pharmaceutical companies are extensively entering into collaborations for drug development and commercialization, and in 2016 alone, approximately 22 deals were signed. Additionally, they have collaborated with foreign pharmaceutical companies to enhance their R&D. The notable examples of these global collaborations include Sun Pharma-Able, Ranbaxy-GlaxoSmithKline, Torrent-AstraZeneca and Cipla-Roche. Moreover, the National Institutes for Pharmaceutical Education and Research (NIPERs), the national level institutes in pharmaceutical sciences have signed agreements with nearly 17 pharmaceutical companies in 2015 to accelerate and translate research into development and build up a culture of innovation within the country.
There are numerous other examples of Indian firms leading the way forward in innovation. Dr. Reddy’s is in the forefront of innovation, becoming the first Indian pharmaceutical company to launch New Chemical Entity (NCE) and has also enabled innovation in drugs for high blood pressure, diabetes and cancer. Also, a few companies have been in the forefront of vaccine innovation. R&D is already witnessing a major change among Indian companies with companies like Cipla, Dr. Reddy’s Labs, Wockhardt, Lupin, and Zydus Cadilla investing in pre-clinical development of small molecules with both novel targets and mechanism of action.
Further, the Indian government has unveiled the ‘Pharma Vision 2020’ initiative to strengthen India’s position as a major hub for end-to-end drug discovery and manufacture. In order to encourage innovation, the Indian government has allowed up to 100 percent Foreign Direct Investment in the pharmaceutical industry to foreign companies who can now avail the benefits of lower cost of highly skilled researchers as well as cost of production for better returns.
The Indian pharmaceutical industry has proven its capability to develop high-quality biosimilars for global markets and this has attracted many foreign organizations to set up small-molecule development and manufacturing establishments in India. This, alongside India’s highly skilled research community and a well-developed scientific base provides a fertile territory for drug research.
Despite so much promise of innovation in the pharmaceutical sector, we still have a long way to go before India becomes a pharmaceutical hub for discovery of new ‘medicines’. In the next part of our series ‘Pharmacy of the World – Innovation and Drug Discovery in India’, we will discuss reasons for lack of world class innovation within our pharmaceutical industry and the factors that have limited the success of the industry to generics alone.