Accelerating growth: Forging India’s bioeconomy

The Biotechnology Industry Organization (BIO) and the Association of Biotechnology Led Enterprises (ABLE), have released a white paper: Accelerating Growth: Forging India’s Bioeconomy. It examines India’s emerging biotechnology industry from a variety of angles and perspectives, focusing attention on the various sub-sectors such as biopharmaceuticals and bio-agriculture, and as well various policy concerns such as taxation, infrastructure, regulation, and technology transfer. The recommendations offered in the report reflect a broad set of issues that need to be addressed for the entire ecosystem to flourish, although the authors feel the issues of regulation and intellectual property represent the most pressing issues for India’s bioeconomy. For India to compete globally, attract investment, and enjoy the economic benefits that its strength in biotechnology can bring, it needs to align itself with global standards in these areas.

Regulation

• The Government of India should consolidate its regulatory agencies and reorganise them so they follow a similar structure to regulatory agencies in the markets into which India sells active pharmaceutical ingredients and finished products.
• India should empower an office within the drug review process to act as the single point of contact during a drug review, guide companies through the process, and resolve problems and conflicting instructions from different committees and agencies.
• The drug review process coordinator should have the mandate to require standard operating procedures and authority to create and enforce deadlines on a project-by project basis.
• The Drugs Controller-General (India) should conduct ongoing quality and process control audits. India should have its own standards for such reviews and related reports, but the process should be crossedchecked annually against foreign reviews of the same products.
• Inspections made by off-shore regulators of Indian facilities and clinical studies should be reviewed against reviews made by domestic agencies. Variances should be reported and they should be investigated as appropriate.

Agricultural biotechnology

• Leadership from the Government and the biotech industry should find a way of conducting the national debate surrounding agricultural biotechnology based on a thorough social and scientific assessment of an appropriate incorporation of biotechnology into Indian and global food security.
• The Government should take an active role in public education about biotechnology and its benefits, and to counteract the spread of misinformation.
• The Biotechnology Regulatory Authority of India (BRAI), first proposed in 2008, should be established to bring a more streamlined regulatory approach to agricultural biotechnology.
• Authority, transparency, and social and economic accountability of BRAI should be subject to on-going review.

Bioservices

• India should harmonise its regulatory processes and requirements with those of other countries.
• To promote greater use of Indian contract research organisations, India should make accumulated clinical data more useful for regulatory filings in other countries.
• In line with harmonisation, India can also adapt the best practices for the oversight and regulation of contract research organisations in other countries, and modify them to India’s specific circumstances.

Industrial biotechnology

• The growth of the industrial biotechnology sector can be promoted at first by mandating use of products for needs that are currently unmet, particularly in energy and environmental remediation.

Bioinformatics

• India can take a global leadership role in formulating and promoting protection of personal data, especially for populations in the emerging markets.

Technology transfer

• India must address gaps in technology transfer quickly.
• It should follow developed countries to integrate the subject of translational research into academic coursework and offer training to faculty members as well.
• As is well known throughout India, the technology transfer enterprise in the US was given its big boost with the passage of the Bayh-Dole Act in 1980. While there are imperfections in any mandated system of technology transfer, India should adopt The Protection and Utilisation of Public Funded Intellectual Property legislation first introduced in 2008. The failure to do so has a significant and ongoing cost to the biotechnology industry and the country in terms of lost opportunity and diminished competitive advantage as other countries rapidly develop their own technology transfer systems.
• Once mechanisms for technology transfer are in place at academic institutions, developing and maintaining professional staff will be a challenge. National training programmes are in place in many countries and can serve as a model for professional development in India.
• Governments with active technology transfer programmes do not track the performance of the programmes or the outcomes associated with the technologies. India can take a leadership role in developing an information system for such tracking. Such a system will assist in the monitoring of progress and point to needed changes in policies and practices.

Intellectual property

• Using the patent system as a mechanism to control drug pricing forestalls making the difficult decisions about necessary investment in the healthcare system, but does not deal with the underlying issues. As politically challenging as it may be, there should be a reconsideration of the intent and application of Section 3(d) of the Indian Patent Act. The issue of access and affordability are clearly paramount, but as a matter of policy, the Government must consider a broader array of solutions and allow its patent system to encourage needed innovation, particularly among domestic biotechnology companies. Moreover, multinational corporations say the use or threat of compulsory licensing dissuades them from investing in innovation in India.

Human resources development and higher education

• Indian universities should develop joint degree programmes in such areas as information technology and biosciences and encourage projects that bring together students in different disciplines for common goals.
• The Indian Institutes of Technology and the Indian Institutes of Management should work together to develop joint degree programmes to produce people with both scientific research and management skills.
• Programmes should be established to train and encourage entrepreneurial researchers interested in commercialising technology to assist them with understanding issues around such things as intellectual property protections, capital formation, market analysis, and regulatory issues.
• India should develop programmes and incentives to attract expatriates with deep industry and entrepreneurial experience to return to India as a valuable source of expertise to launch new companies or fill specific skills gaps.

Infrastructure

• India could create special zones that provide biotechnology companies with reliable water and power needed for their operations. These zones can have dedicated power plants and water purification, as well as sewage processing. The process of transferring specialised equipment from overseas sources should be expedited.

Taxation

• The investment tax credit in equipment that India provides high technology companies should be extended to biotechnology companies, as should the ten-year tax holiday afforded companies once they begin producing products.
• R&D tax credits extended to biopharmaceutical companies should be extended to contract research organisations and companies in other sectors of biotechnology.
• India should introduce accelerated appreciation for research and development expenditures, which could encourage generic drugmakers to invest in biologics and put India in line with China and Singapore, which both offer such incentives.
• India should offer tax holidays for R&D related income. In addition, India could incentivise the development of innovation through tax breaks for revenue derived by the sale of patented products.
• To incentivise investment in early-stage, privately held biotechnology companies, India should forgo taxes on gains from investments in these companies held for more than 10 years.
• India should consider the creation of tax favourable financing vehicles to allow the creation of off-balance sheet financing of R&D projects by private investors.

M&A and partnering

• India should promote itself to biopharma companies as a gateway to Asia, provide forums that foster partnering opportunities, and take steps to quell concerns about the protection of intellectual property and other policies, laws, and business practices that impede partnering activity. M&A and partnering have been important mechanisms to access capital, technology, and new markets.
• Since access to innovation and markets are two reasons potential partners with Indian companies would seek to enter into a partnership, India will need to address issues that limit its development of innovative products or make its market unattractive to foreign companies despite its large and growing population.

Finance

• Angel investing: There are limited interventions for public policy, but providing incentives through tax credits or other measures for angel investors could encourage the availability of capital for early-stage biotech.
• Incubator resources: Direct grants of investment capital to incubators may not be the most effective approach. A matching programme to leverage Government investment where the Government provides funds on a 1:3 or 1:4 basis, and the incubator raises the larger portion of capital from private and local public and private sources, might be the best way to engage local communities and align interests.
• Government programmes: The Department of Biotechnology programme should preserve a meaningful role in capitalization in order to encourage work towards areas of strategic interest to India. A mechanism should be created to encourage Indian state governments to participate in funding.
• Venture capital: India should create matching programmes similar to China’s Emerging Industry Start-up Investment Scheme. An adaptation of this programme could be a game changer for India.
• Public listing: As the Indian government accumulates experience with offshore listings, it could consider expanding the purposes for which Indian companies may list overseas.