In-PharmaTechnologist: Focus on India

India now second only to US as R&D powerhouse

By Kirsty Barnes

- Last updated on GMT

Related tags India Pharma industry Pharmaceutical industry

India is emerging as a powerhouse of pharmaceutical R&D. Backed
by a scientist president and with an army of talented scientists,
the country now has R&D capacity second only to the US, at
one-fifth of the cost.

And "the strength of India is that these cost savings aren't at the expense of quality,"​ said Dr Brian Tempest, chief mentor, Ranbaxy Laboratories, at last weeks Economist pharmaceuticals conference.

"India is now the third most popular location for R&D investment and has plans to develop itself further from within as the number of original domestic institutions begins to evolve,"​ said Tempest, who predicts that the country could now be the future of the pharma industry.

Cost savings are sometimes as great as 85 per cent on R&D conducted in the West, and India has the highest number of FDA-approved drug manufacturing plants outside the US.

"No other country compares,"​ said Tempest.

With the world's fourth largest reservoir of scientific manpower and 150,000 MSc Chemistry graduates per year, India is also filling a gaping hole being left in the EU and US, where graduates are abandoning science for more lucrative careers in business.

Indian graduates also offer multinational companies the advantage of speaking English and the productivity benefits they can offer are continually being recognised.

"From a US point of view, Indian chemists are seen as 30 per cent better educated and work nearly 50 per cent longer weeks for 20 times less,"​ said Tempest.

"15 per cent of staff in the US pharma industries' laboratories are now Indian,"​ he said.

A perhaps more secret weapon that India holds is that it will continue to remain a young population, while in Europe, North America and Japan the population will age dramatically over the next few decades.

In these countries, retirees are growing faster than workers and the fertility of their markets will decline as they are held back by the ageing workforce. In, addition, lifestyle diseases such as obesity will also pose a problem, particularly in the US.

India, who is not affected by these problems, will increasingly be called upon to provide a global workforce.

Pharma companies who once shied away from India are now flocking to either outsource various business functions or set up infrastructure within India to position themselves to capitalise on what many tip will be the future of pharma.

2005 witnessed a large number of deals between Indian and multinational pharma companies, in the form of mergers, acquisitions and outsourcing contracts and this activity is set to continue.

There are, however, global risks with investing in India, such as is its heavy reliance on oil consumption, and whether or not it can further develop adequate infrastructure and regulatory rules that will satisfy foreign pharma investors.

India now adheres to the TRIPS agreement and enacted the Patent Protection Act in 2005 to protect intellectual property but at this stage, no one knows how long it will take for the benefits of the new law to take effect.

Counterfeit drugs are also a concern, although task forces have been set up in India in attempt to wipe the practice out and India does not feature in the top 5 countries who are responsible for producing fake drugs. The USA does, however, said Tempest.

India's industry is also still fairly weak in the areas of toxicology and Phase III clinical studies due to its past focus on generics, but again, this is changing, he said.

Although India still has a long way to go before it is a dominant pharma industry figure, the potential is certainly there, and India is actively grabbing its chance to be the next big thing.

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