How has the biotechnology industry weathered the economic headwinds of the past few years?
| Dr PM Murali |
Indian biotech industry in my opinion is growing at a good pace in spite of the global economic turmoil. A 14 per cent upward growth currently is very good and from ABLE we see growth peaking at about 30 per cent around 2025 making India enter the $ 100 billion exclusive club of nations in this field. The key reasons in my view the way the Indian industry has worked is on account of its fundamentals: frugal innovation, focus on affordable health and also excellent middle and top management skills. In a world where the industry is going through a cash crunch and formidable costs for development, the Indian approach has made the biotech industry grow at a steady pace here without caving in like the rest of the world. I think how a lot of Indian biotech companies are managed by competent CEOs can serve as useful lessons for managing biotechs globally. In India, we are shy to talk about our achievements but it is useful in the context of bringing about learning. We should not confuse frugal innovation (competitive advantage) with cheap labour costs (comparative advantage). This is not what India is all about. We have the DNA to have practical financial models and also adapt very quickly to the environment around us.
What are the challenges going forward? Will innovation be starved of the funds it needs?
Biotech industry at various levels involves spend on capital expenditure and this involves high capital infusion. Due to the time it takes for biotech products to reach market, ROI in biotech is one of the longest. Most funds in India have a choice of investing in diverse areas and hence they look at low hanging fruits which, unfortunately is not biotech. If the country believes that the next set of game changing technologies for clean energy, public health and wellness will have to come from the biotech industry then there has to be creative ways to make this happen here. One needs to make large funds to set apart a small percentage to fund biotech start ups. These funds can be incentivised for this initiative. Only with bold and non traditional approaches can we bring in a climate that is conducive for the growth of this Industry. Right now except funding from Government departments like DBT, there are very little funds for biotech start ups. This does not auger well for the country which has an immense challenge ahead of it.
This year has seen many legal milestones which will shape the futures of the pharmaceutical industry, not just here in India, but across the world. Do you believe that the Indian patent law nurtures and promotes innovation?
Indian patent laws are now gearing up to be in line with Government’s policies to provide affordable healthcare and access to cost effective technologies for mass consumption. This assumes significance given the recent events such as Natco’s victory of compulsory licence over Bayer, Cipla’s victory in a patent infringement case against Roche and a very recent victory for Cipla against Pfizer over Sutent. This could be interpreted world wide as anti innovation. In my view it is important that our laws should balance innovation and affordable health. Otherwise, we may risk the development of new products as people will be afraid to invest in this space.
Evolva’s mission is to discover and provide innovative, sustainable ingredients for health, nutrition and wellness building on biosynthetic technologies – using yeast to create products via fermentation. Given that Evolva’s approach is protected by a broad IP estate and includes multiple pending and granted patent families, will India’s patent laws, as they stand today, offer sufficient protect ion for Evolva’s technologies?
We believe that India’s IP climate is mature enough to nurture innovation that could benefit its populace. This is likely to get more refined going forward since the country is likely to witness an innovation avalanche in the next decade. More than 800 out of top 1000 multinational companies now have some form of presence and investment into R&D into India and this could spur all round innovation across several industries with biotech being no exception. We at Evolva are sure that Indian IP laws would favour innovation and protection of IP. And I am sure most Indian companies share this view.
What have been ABLE’s initiatives to sensitise the Indian government on policies needed to spur growth?
Several initiatives have been taken by ABLE in the last two years. We have worked on the pharma policy for the Department and also published our road map and vision for 2025 in association with DBT. We have taken emphatic steps in bringing about the biopharma policy of the Government. ABLE has been part of nurturing and mentoring young entrepreneurial talent along with the Government. In addition we now have about 11 working groups in ABLE who are working on their verticals to bring out regular white papers sensitising the requirement and issues. We have a continuous feedback mechanism with most departments of the Government of India. We are also writing several useful policy documents that would be a good guiding principle for a number of biotech initiatives that the government is planning.
What innovations can the biotech industry offer in terms of affordable quality medication, given that the medicines of the future will be biologics rather than small molecule entities?
Biologics clearly offer several advantages over small molecules in treating various ailments. But since so many of them are patented, not many companies ventured into this space, which is likely to change in this decade due to patent cliff. This could increase the players in this space driving sales volume which in turn is expected to bring down price making it cost effective. Indian government also ensures that “ever-greening” of patents are kept at bay to shield cost escalation of life saving products. Measures also include a price control system and including certain products in the national essential medicines category.
With regard to biologics, Indian companies are expected not just to make “similar biologics” but also “super biologics” that outsmart existing product lines opening up new markets. In fact this space could offer loads of innovation potential for both process innovation and product innovation.
The country has tasted success with biogenerics thanks to the process patent law. What are your views on the Draft Biotech policy unveiled by DBT in June this year? Will these regulations help India to become the hub for similar biologics (biosimilars)?
The draft biotech policy covers the major areas that need to be covered. This is a good first step in the right direction. The real challenges in my view are the ways in which implementation of the policy is carried out in our country. Our past record shows that our implementation is poor with too much of paper work, lack of transparency and red tapism. As a developing country we should overcome these internal challenges with a lot of courage and fortitude. We should have a visionary regulatory set up and path breaking trends which are unique and customised to our requirement.
Are venture capitalists showing an interest in the biotech industry, more specifically Indian companies?
There are unfortunately too little VC funds available in India. As mentioned, it is important that we look at creative ways to make VCs look at the biotech industry as the first choice of investment rather than the last which is the current trend. Initiatives to fund clean energy and cutting edge technologies should be adequately incentivised. We have to create the micro and macro environment. Like we need roads and infrastructure, the essentials of growing biotech in our country also needs to be addressed. If we fail to take a leap of faith for the next decade, we could end up ruing that we did not do now. No country which aspires to be a super power can lag behind in cutting edge technologies. India has to watch out and ensure we are ahead of most other emerging powers.