India's biotech companies are emerging as major global players. The increasing know how and technological advancements are adding onto the innovations happening in the generic drugs and vaccines segments while maintaining an effective cost advantage.
How does the India advantage create global implications?
The Co-author Peter A. Singer, MD, of the McLaughlin-Rotman Centre for Global Health (University Health Network and University of Toronto) remarked: “India is innovating its way out of poverty. With a massive and increasingly well-educated workforce, India is poised to revolutionize biotechnology just as it did the information technology industry".
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Drug Pricing: the India advantage and impact
Drug pricing is one area which has already felt the impact of Indian innovation, Research, Technology and Drug manufacturing abilities. The markets for generic biopharmaceuticals globally is expected to increase significantly in the next coming few years as several ‘blockbuster’ drugs lose patent protection. Indian companies appear well positioned to leverage their cost-effective manufacturing capabilities to compete in the global markets.
The 1997 launch of hepatitis B vaccine Shanvac-B, developed by Shantha Biotechnics of Hyperabad, helped cause a 30-fold domestic price reduction – from about $15 for a comparable imported product to roughly $0.50 – and credits Shantha’s innovative, efficient manufacturing process and well as subsequent local competition. Source: 1997 Paper by Peter A. Singer and Abdallah S. Daar, MD, Sarah E. Frew, PhD, Monali Ray, Rahim Rezaie and Stephen M. Sammut.
One of the celebrated Indian pharma companies: Biocon's recent product (Insugen) entered the domestic market, which gave a strict competition to the international competitors who were forced to reduce the Indian price of their products by nearly 40%. Biocon priced its product even lower still and says Insugen remains India’s most affordable human recombinant insulin product.
As this trends keeps growing further with more Indian Biopharma companies entering the market, the cost of manufacturing will go down further, which will surely impact the pricing and hence the afford-ability and accessibility of the drugs.
Research Innovation: International Collaborations
With FDI opening up slowly in this sector and mergers and acquisitions taking place (eg: Fortis and Escorts) in the healthcare segment, many Indian firms are using service contracts with overseas firms to fund their operations locally. Much emphasis is being put into carrying out research. The clinical trials segment is also taking up good shape with both the patient community and sponsors joining hands to create a strong and stable ecosystem to address critical diseases.
Innovation: addressing critical diseases with clinical trials
Clinical trials are being held globally and these have been gaining in trend globally since a couple of years now. India is at the forefront of this emerging billion dollar industry. While addressing critical diseases, Indian medical innovation is creating new rules for the game. There are many emerging clinical trial SME's in India which are innovating across while setting new standards globally.
India is poised towards becoming a hub for clinical trial industry with many small and medium enterprises taking the lead in collaboration with international companies which are looking at outsourcing the work to Indian shores which provide technological advances at a well defined cost advantage.
What are the barriers to growth?
There are many barriers to growth for this industry. The first and foremost being risk aversion amongst the local investing community. Since such drugs take time in research and development and then taking them to the market is an all together different task, not many investors are aligned to investing into such a business venture.
The Indian regulatory bodies are also catching up, but are slow in their evolution. Manpower is also an issue to be addressed in India. Trained and Skilled manpower is highly necessary in this domain. Rural India is a major market for upcoming drugs and addressing high cost of distribution in such areas is a challenge.
The biotech sector in India is also facing a challenge in terms of fiscal initiatives by the Indian Government.
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