Pathbreaking innovation, regulatory harmonization critical for biotech industry’s future

Industry leaders and government officials agree that innovative financing and policies will drive Indian life sciences industry into investing in high-risk innovation

New Delhi: If you see the basics of discovering new entities, the risk is extremely high. But the reward is also pretty high. Also, if you want to move up the value chain in the industry, that’s what companies would do, says Satish Reddy, Chairman, Dr. Reddy’s Laboratories.
Reddy shared his thoughts alongside other leading names of biotechnology and pharma sectors at a panel discussion on the sidelines of BioAsia 2022, one of biggest life sciences focused event held in Hyderabad annually.
Elaborating his initial thoughts Reddy shares the mantra for the growth of the sector: “If you are very successful in generics, there is also this issue of investing back in the generics to keep that growth momentum going at one level. There are also futuristic areas that you want to invest in. And that’s where new chemical entities come in. Here the game is very different. The level of investments is very high, the uncertainty is extremely high. This is not an area where it can be done by the industry alone. The government also has to pitch in. Taking a look at the overall ecosystem from all angles – from academic institutions, giving incentives for the industries to do this, direct government funding support in some areas – to institutions as well as to industry.”
“Risk capital is the biggest issue we face in the country. Risk capital is certainly not enough neither within the company nor outside. And therefore, somebody has to take lead in that. Secondly, this sector has been the sunshine sector of the country in the last 30-40 years. We are a rare country where 50% of the businesses are in India and 50% is the export,” mentions Sanjiv Navangul, MD & CEO, Bharat Serums and Vaccines.
Navangul adds: “There is clearly a need for a solid leadership from the government to ensure that we build a very strong R&D ecosystem. Unless there is R&D innovation, we will not get at becoming 100 billion-dollar industry. We take too much pride in being the pharmacy of the world in chemistry or bioequivalence sort of work now. In our PLI scheme, there was a huge emphasis on ANDS. We must be aligned philosophically to build the ecosystem. To be self-sufficient we need to 1) risk capital for healthcare must be considered for the talent pool we have. 2) Compare the NIH support, the US Government support on the vaccines that happened. You cannot ignore the amount of funding that went into vaccines there. For the regulatory framework, we need diplomatic channels created by the government towards USFDA, towards EU or Japan to really work with regulatory agencies.”
“If you look at the vaccine journey that has happened, it has been a strong public-private partnership in many countries including India. Then it was the speed of the vaccines. We need to build an ecosystem to speed up innovation and remove the layers of repetitive tasks. Finally, it the execution of how the companies want to build the ecosystem. And the game is moving from small molecule to large molecule to gene therapies where we are again talking about requiring a larger investment. How we build the regulatory framework to make things easier for companies in India, building relationships with other regulators so that we can have a common programme across the countries will be very critical,” said Sharvil Patel, Managing Director, Zydus Cadila.
“For a single organization, it’s very difficult to do a clinical trial in India, a clinical trial at WHO, for instance. How you reduce work in an adaptive trial design, identifying high-risk individuals for whom the drug can be used and with a close partnership between FDA, the NIH and companies are necessary to find solutions for neglected diseases or diseases that have no solution. An ecosystem like this will spur a lot of innovation,” added Patel.
Kiran Mazumdar Shaw, Executive Chairperson, Biocon Group said: “India needs to move from low-risk research and innovation to high-risk research and innovation. And that’s where we are lagging. It’s not that we lack research or innovation skills. If you also include the research services companies that are constantly delivering research services to high-end pharma companies globally, I think they are doing cutting-edge research for clients. So it’s not that we lack capabilities. But we lack two things. The second part of my answer is based on the ecosystem that you referred to. The ecosystem has to be created. We need the virtuoso ecosystem where the academia generates cutting-edge ideas which are then basically shaped through either startups or directly licensed by pharma who then invest and take it to the market.”
“Investing in high-risk innovation is very capital intensive and the return on that investment is both uncertain and long term. I think that is what deters Indian industries from making big bets on cutting-edge innovation which is what we need to do to move up the value chain.  Right now, we have a huge capture of volume aspect of pharmaceuticals at 4%. While we are labeled as the preeminent pharmacy of the world, we also want to be known as the innovator of the world. For this, we need innovative financing and policies that will drive Indian industries into investing in high-risk innovation,” Shaw added.
Policymakers on the same page?
“We are moving in that direction based on the opinion of the industry and other stakeholders. Because research is not a single-mind effort. It is a collaborative effort that we all understand and are aware of. Recently, the policy from both DST, DBT, and DOP are moving in that direction. Recently, the production of the Covid vaccine in collaboration with various stakeholders and companies like Bharat Biotech enabled the production in a much shorter timeline in a very collaborative fashion. The point is that the collaborative effort is much needed and was well shown,” said N. Yuvaraj, Joint Secretary (Policy, Medical Device, Pharma Bureau), Dept. of Pharmaceuticals, Government of India.
S Chandrashekhar, Secretary, Dept. of Science & Technology agrees that innovation is a high-risk game, and the industry may not have a deep pocket to take a risk when the molecule doesn’t go forward. “But at the same time, he says, if you look at the global scenario, I don’t think drugs are discovered by an investment made by the government.
“NIH is an agency that gives funds to academic institutes for research. Similarly, today between DBT and DST there have been multiple calls for early discovery where we do fund academic institutes in partnership with industry. Since 1999, Dr. Anji Reddy had launched a scheme wherein the Government was putting in 70% in the high-risk research programs and the ecosystem was built. But at that time India didn’t have the kind of talent that we have today. We are trying to build an ecosystem now with service industries like CROs, pharma companies like Dr. Reddy’s and Biocon, and the Government – if we could partner, we believe that India can get into innovation very soon, also given that the CROs can provide better expertise now. DST is likely to launch a couple of mega schemes in the innovation area. By mega schemes, we don’t mean a billion-dollar investment. It is to prioritize making India self-sufficient in the generic sector.”
Way forward
On the question of whether the industry will reach a 120–130-billion-dollar pharma market size in the next decade, most of the experts were unanimous in asking for the governemnt support.
Shaw said that the Indian industry is very capable to deliver on this promise, but the Government has to partner in getting there.
As per Sharvil, It’s possible, but it’s not an easy ride. “We need to reward innovation through strong IP ecosystems and strong ground execution by the government.”
Satish called for a collaborative effort. “It’s a joint effort. I urge the Govt. to take bold decisive steps.”
Yuvaraj stressed on the need to act more holistically. “We have taken cognizance of all the measures discussed early on. Whether the investments should happen by the government or private sector solely or in a hybrid model – we need to figure out the mechanism of adequate investment for innovation by 2030.”