Deciding the responsibility
The shift of clinical R&D operations to other countries that are considered more hospitable than India can be perceived as a threat to India’s dominance in the clinical trial sector. As things have seriously gone wrong after the notification, should the government be blamed for its lack of foresightedness?
Dr VVNKV Prasada Raju Asso. Vice President – Corp Strategy, Granules |
“It doesn’t portray the indifferent attitude of the Indian government towards the pharma industry problems, however, this definitely implies that law should be drafted with a view to regulate the research activities and not to restrict the same,” says Dr VVNKV Prasada Raju, Associate Vice President – Corp Strategy, Granules. Raju adds, “Since the implementation of the law in January 2013, the data shows that till April 2013, only 12 clinical trials have been approved by the authority as compared to the almost three digit figure in the last year. One of the reasons for the decrease is the erratic nature of the regulatory timelines for clinical trial approval and the difficult-to-deal with demands of the authorities like protocol amendments, site selection etc. which in turn further increases the unpredictability and timelines associated with regulatory approvals. It is very unfortunate that these uncertainties in the regulatory framework and approval mechanism may lead India to lose its current position as an attractive clinical R&D hub.”
SM Mudda Executive Director – Technical & Operations, Microlabs |
SM Mudda, Executive Director – Technical & Operations, Microlabs says, “The recent criticism related to clinical studies conducted in India has led to virtual stoppage of approval for conducting trials by Drugs Controller general (India) DCGI office. The delay in the system approval has stopped new studies being conducted by multinationals in India.”
According to Dr Manu Chaudhary, Joint Managing Director, Venus Remedies, and Director, Research, VMRC, which is R&D driven company, the most important concern is that R&D based industry has to compensate for innovative drugs even if a patient is taking placebo or other concomitant medication. “As a result, patients suffering from life threatening problems are denied access to potential research-based new drugs. More importantly, this gazette will impact the future growth of R&D as well as development of low cost high quality medicines in the country,” opines Chaudhary.
Market statistics
Dr Manu Chaudhary Jt. Mng. Director, Venus Remedies, and Director, Research, VMRC |
The government’s notification has brought turmoil in the clinical R&D scenario, however, there is a silver lining to the cloud. To boost the R&D culture in India, Government of India (GOI) has come up with some concrete measures. Utkarsh Palnitkar, Partner and Head, Life Sciences, KPMG-India says, “The GOI realises that innovation is imperative for the domestic pharma industry to move up the value chain and further cement its position as a pharma global hub. The GOI has taken a number of steps to boost the R&D culture in the country: weighted tax deduction of 200 per cent for R&D, initiatives to set up a Rs 2000 crore venture capital fund to foster R&D, setting up institutions like BIRAC to stimulate biotech R&D are indicative steps in the positive direction.”
Utkarsh Palnitkar Partner and Head, Life Sciences, KPMG-India |
He adds, “Government of India, at this stage should recognise that the need of the hour is to develop strategies for funding options (grants, loans and capital), collaborative R&D initiatives with the industry, incentivising R&D efforts and building a comprehensive R&D eco-system. Lessons can be learnt from similar programmes/strategies adopted in BRICS and the US to boost R&D initiatives; key references can be, Brazil, which has heavily invested in PPPs as a means to help the country improve its biotechnology innovation and bio-manufacturing capabilities and China which implemented five core incentives programmes designed to spur on research and development. These include reduced corporate income tax for high and new technology enterprise, super deduction for eligible costs, tax concessions for advanced technology service enterprise, custom duty and VAT exemptions / refunds for R&D equipment purchases, and tax concessions on technology transfers.”
According to Palnitkar, it has been a roller-coaster ride for the Indian research industry. He informs, “India was poised to reach a billion dollar in contract research by 2010 and has the potential to become the second largest in Asia after Japan. However, the revised estimates suggest that the market is ~ $500-600 million currently and it may take three to five years to reach the billion dollar mark. The current HC-LS research market in India is ~ 4 per cent of global addressable opportunity, thus presenting a huge potential to realise.”
Is the government support mandatory?
“Pharma industry in the West collaborates with key stakeholders in the eco-system (academic, scientific research institutes), uses co-development initiatives and to an extent opens innovation initiatives. Both the administrators and Regulators (US Government, FDA etc.) do have clarity on the initiatives thus acting as facilitators in one context while acting as watch dogs in other. While these initiatives can be explored by Indian players, the key is customisation to Indian context and more important policy/regulatory clarity on these initiatives,” informs Palnitkar.
Government, being a policy maker, will always have a say at any point of time in the functioning of any industry and pharma sector is not an exception. “As the drug approval process and clinical trial regime depends on the regulatory body and government policies, industry initiatives might not be a solution,” asserts Chaudhary.
Sucheth Davuluri Chief Executive Officer, Neuland Laboratories |
“The Government has to be transparent in terms of its policies for R&D. It has to set the expectations of how it’s going to protect the intellectual property of companies that do R&D in India, they cannot be subjective. Companies should know what to expect. Apart from that, the government also has to facilitate investment in infrastructure that will enable R&D and it also needs to incentivise the companies by way of tax holidays, creation of pharma cities which can bring about a lot of focus and concentration of knowledge. The industry can focus on what it can do best and the government has to play its role by creating the right environment,” opines Sucheth Davuluri, Chief Executive Officer, Neuland Laboratories.
Pharma cities, the answer?
Though R&D was never considered India’s cup of tea, India has slowly and steadily established itself as a force to reckon with in the field of clinical R&D. However, the recent notification has predominantly affected the clinical R&D sector and at the same time has sent negative vibes across the industry. Therefore, the government should look at the ways to re-instil hope among prospective R&D players. Special pharma cities is widely accepted concept which is expected to propel innovation.
Raju says, “The concept of special pharma cities or SEZ provides enterprises and developers with a favourable and attractive framework of incentives and benefits. Thus, it definitely acts as a booster for R&D by offering a trouble-free business-friendly environment and world class infrastructure.”
Sharad Dahatonde Gen Manager – Biotechnology, Elder Pharmaceuticals |
Sharad Dahatonde, General Manager-Biotechnology, Elder Pharmaceuticals, echoes Raju’s views. He says, “The pharma city should be created under the PPP and must have world class infrastructure with state- of-the-art environmental protection measures.”
“Dedicated pharma cities and parks do promote an integrated ecosystem for innovation. However, it is imperative that industry and the government clearly defines, how do we measure the productivity of the dedicated cities/parks?, how many of the cities/parks are productive? how do we promote the culture of collaboration between various tenants in the cities/parks? and what are the lessons learnt from successful park/cities and how are the learnings disseminated?,” suggests Palnitkar.
Chaudhary has a different set of views. More than the special pharma cities, if government focuses on industry friendly policies, that would help the most to boost R&D, insists Chaudhary. “With the kind of clinical trial regime in India, special cities would not be the answer to boost R&D in the Indian pharma industry. Rather, better and transparent regulatory bodies at the government level and self regulation of pharma companies would be more effective. An autonomous body is the need of the hour, wherein regular participation of government bodies and pharma institutions would ensure effective and robust R&D process and procedures,” opines Chaudhary.
There are some bones of contention between the government and industry. Chaudhary informs, “The new rule demands the new drug to be 100 per cent efficacious. This is practically impossible.” All said and done, the relationship between the industry and the government should be symbiotic. While framing policies or new rules, industry should also be kept in the loop. Current wave of resentment among clinical R&D players, if not pacified now, may not only lead to confrontation between industry and the government but will also make India’s journey towards innovation difficult.