India's R&D policy to bolster drug discovery

Indian drug companies have a new ally. The UAE government is all set to provide incentives, including financial contributions, and will help create a full ecosystem to support Indian pharmaceutical companies having strong research and development facilities, reports The Pharma Letter’s India correspondent.

With the Department of Pharmaceuticals' (DoP) vision of developing India as a drug discovery and pharma innovation hub, the Indian government recently concluded a rapid assessment of India’s opportunity in global pharma R&D.

The basis of the DoP's vision was a white paper shared by McKinsey, which outlined potential and key imperatives for the Indian government, even as it described several opportune areas for developing excellence. It was pointed out that almost all the patented pharmaceutical products have come from global Big Pharma, and their research and development (R&D) spend as a percentage of sales is around 20% of their sales turnover.

In terms of highest R&D spending ratio to revenue for Indian drug companies, data showed Sun Pharma Advanced Research Company (SPARC) had 587% investment, followed by another drugmaker, Suven Life Sciences, which spent 304% of its revenues on R&D in FY20.

Other pharma companies also figured in the largest spenders of R&D in absolute terms. Alembic Pharma and Unichem Labs spent between 14% and 31% of their revenues on R&D. Dr Reddy's Lab spent 11.3%, Cipla 8.9%, Aurobindo Pharma 6.3% and Sun Pharma 9.8%.

In financial year 2020 in India, Lupin spent $225 million on R&D (14.3%). By contrast, the lowest was by Torrent with $57 million. On an average, Indian pharmaceutical companies tend to spend less than 13% of their annual turnover on R&D.

UAE opportunities

At a recent event, The UAE-India Healthcare Conference 2020, organized jointly by the Embassy of India, Abu Dhabi, and Consulate General of India, Dubai, FICCI and Invest India, it was pointed out that higher R&D costs, a relatively dry pipeline for new drugs, increasing pressure from providers for reduced healthcare costs and a host of other factors are putting pressure on global pharmaceutical companies.

Speakers noted India’s booming pharmaceuticals industry is not only a great source of innovation and employment generation, but also has become a global healthcare provider in need.

During the Covid-19 pandemic, speakers said India has shown exemplary work on international cooperation by sending valuable medicines to many countries, and added India is now world renowned for its pharma innovation and for producing high quality medicines at a low cost.

Pavan Kapoor, India’s Ambassador to the UAE, drew attention to the close collaboration between the two countries during Covid times and stated the UAE government is keen to explore ways to promote collaboration and partnerships and has shown a strong desire for setting up manufacturing facilities for vaccines and generic medicines by Indian companies that have strong R&D facilities.

Ambassador Kapoor asked Indian companies to look closely at the offer, aimed at providing an excellent opportunity to enter the Gulf Cooperation Council (GCC) as well as African markets in the entire pharma supply chain ecosystem, and emphasized that there were huge opportunities for the UAE to invest in India where seven mega drug parks have recently been announced.

Almost $20 billion of India's pharma output is exported, said speakers, with 40% of exports predominately to the US, the UK and other countries like South Africa
Though India remains a price sensitive market, speakers said the increased buying power and epidemiological changes prevalent in the country could spur dramatic growth in sales volumes.