Center for Global Health R&D Policy Assessment

The Indian biotechnology and pharmaceutical industries face a rapidly evolving policy environment. Recent changes in the intellectual property regime, price controls, debates about compulsory licensing and other discussions of access to medicines place Indian firms squarely in the global eye. In the midst of this international attention, Indian firms have continued to be important players in providing low-cost access to medicines and other technologies needed around the world and are now focusing on expanding their reach to new products and regions. The question on my mind, however, is whether Indian companies can build upon this reputation and do even more to help meet the needs of the poor by developing needed new technologies.

Despite the advent of product-development partnerships and other efforts to stimulate research and development (R&D) for neglected diseases, there is still a lack of effective tools to prevent and control diseases such as tuberculosis, malaria, and leishmaniasis, as the recent report of the WHO’s Consultative Expert Working Group on R&D Financing and Coordination documents. Given India’s growing public and private investments in innovation, some advocates and experts suggest that India can play a big role creating these badly needed technologies.

On May 15, the Center released the draft report “India’s Role in Global Health R&D” that explores this idea. The study, led by Paul Wilson and myself, looks at India’s health R&D capacity today and explores to what extent Indian researchers and product developers are able—and willing—to contribute to the development of vaccines, drugs and diagnostics for diseases of the poor in developing countries. The report also discusses the role of the Indian government and international partners in supporting neglected disease R&D in India and identifies some of the policy and financing obstacles that product developers face in coming up with these new products.

Our report, which focuses primarily on industry, paints a nuanced picture of India’s likely contribution in the short to medium term. Although the R&D capabilities of Indian firms are growing, there are still significant gaps in upstream product development such as new drug and vaccine discovery. At the same time, the high costs of late-stage development, specifically phase III trials, inhibit many companies from conducting the full spectrum of product development on their own. Moreover, there is a marked difference in the scale of the R&D portfolios of large multi-national firms and Indian firms.

The well-known Indian vaccine company Panacea Biotec, for instance, spent $17 million on R&D in 2011, a considerable amount for a company of its size. However, in comparison, the UK’s GlaxoSmithKline spent $6.2 billion on R&D in 2009. If standard rates of attrition in the biotechnology and pharmaceutical sectors hold, then the relatively small scale of Indian investment in R&D means that the number of new products emerging from India in the next few years will remain modest.

One of the most important findings of the study is that the Indian biotechnology and pharmaceutical industry is not monolithic. There are key differences among the vaccine, drug, and diagnostic industries. Characteristics such as ownership structure, access to international markets, and regulatory pathways influence how firms approach R&D as well as neglected disease markets. Within each technology area as well some firms are sticking to traditional strengths in process innovation and low-cost manufacturing while others are aggressively pursuing new product development. In the drug industry, companies such as Glenmark and Wockhardt are investing in new drug development, whereas Cipla, one of the largest drug companies, is reinforcing its generics-based business model. If the potential of Indian industry for global health R&D is to be harnessed, then these differences must be recognized. In some cases an Indian firm may be the best choice to cheaply manufacture a commodity developed outside of India, but in other cases, especially for vaccines and diagnostics, firms have the potential to develop new and better follow-on products and possibly even create entirely new global health technologies.

Hoping both to build the biotechnology and pharmaceutical industries as engines of economic growth and to engage them in meeting India’s health needs, the Government of India is investing in the innovation system, constituting inputs and policies such as human resources, financing, regulation, and infrastructure that allow R&D-driven firms to thrive. It is critical that this support continue and grow. Additionally, to ensure that India’s growing R&D capabilities are targeted at least in part to the needs of the poor, both the government and its international partners must expand focused support for projects with substantial potential public health benefits and come forward to create appropriate purchasing channels and other incentives for product developers. For example, clear procurement priorities for both domestic and international public health programs will help firms decide where to focus their R&D efforts. “India’s Role in Global Health R&D” includes a discussion of the measures that donors and the government can take to facilitate the development of neglected disease technologies in India.

Although our findings suggest that are significant constraints in the ability of Indian innovators to develop new drugs, vaccines and diagnostics, their capabilities are growing. The policy environment, in India and internationally, will have a considerable influence on the new technologies that ultimately emerge from India’s investments in health R&D, and on whether they include badly needed new tools to combat the diseases of the poor.

The draft report "India’s Role in Global Health R&D" will be available online for public comment until June 1, 2012.