REQUIEM FOR A DREAM?
From the late 1990s right through mid-2000s, research on a series of drugs progressed successfully from preliminary experiments to phase I / phase II of clinical trials (tests on humans). But somewhere along the road, they lost their way. A string of drugs failed while others were abandoned. Today, the Indian pharma is at its crossroads. Disheartened by series of setbacks, the industry is on the course of revising its R&D strategy to that which hinges on steady returns.
The Businessworld article titled ‘Death of a Dream’ succinctly draws the grim picture in drug research, touching upon its causal factors. The article, however, is silent on the role of the extant legal and policy regime. An analysis from these perspectives would have been better appreciated by the legal fraternity and policy framers.
Course of change in R&D strategy
Back in 1997, heads turned when DRL licensed out a new drug to Danish pharma major Novo Nordisk in a multi-million dollar deal. Everybody expected the industry to repeat the same kind of success in drug discovery. By 2001, DRL had nine molecules in the pipeline, including two in late stages of clinical trials. DRL was termed as “the molecule millionaire” by a leading journal. In 2005, a landmark agreement between DRL, Citigroup Venture and ICICI Venture set up India’s first integrated drug development firm, Perlecan Pharma. However, all the research projects and ventures had to be called off after observing side-effects in later stages. The situation was not different in India’s half a dozen other premier pharmaceutical firms. Further, the Perlecan debacle hampered the prospects of other firms in entering into partnerships for funding their research activities.
The article rightly draws the course of change in R&D strategy of premier pharmaceutical companies – from high-risk, high-reward drug discovery to a strategy hinged on steady returns. For instance, last year, as the bitter after-effect of its 16-year-long futile effort to bring a new drug into the market, Dr. Reddy’s Laboratories removed the words, ‘discovery led global pharmaceutical company’ from its grandiose vision statement. The removal sums up the crossroads at which Indian pharmaceutical sector stands today. In essence, the wild optimism which was present in mid-2000s no longer exists.
Fortunately, despite the setbacks, some pharmaceutical companies such as Glenmark, Piramal Healthcare and Lupin remain committed to new drug development. However, it is too early to draw a positive note unless they achieve substantial tangible results.
Reasons for failure in drug research
a) Early failures precluded the pharmaceutical companies from conducting further research on drug development. From a realistic perspective, the industry failed to appreciate the risks associated with new drug discovery. Failure is an inevitable component of the 8-12 year development process.
b) Lack of investment in R&D is another factor for the failure. For instance, Ranbaxy’s R&D budget fell from 9.2 per cent of sales in 2005 to 5.6 per cent in 2008. Firms are estimated to spend only 10-30 % of their R&D budget on new drug development. This further exacerbated research on new drug development.
c) Lack of focus and strategy in drug research
d) Dearth of experienced scientists in drug research.
The Indian pharmaceutical sector has grown into a $20-billion global industry, flooding international markets with generic drugs and challenging big pharma’s patents. Discovery of a new drug could have placed Indian pharmaceutical industry in an altogether different league. For instance, the sales of US drug giant Pfizer’s top selling drug, Lipitor, is higher than the total sales of the world’s largest generic drug maker, Teva Pharmaceutical Industries. Unfortunately, as I mentioned earlier, the premier Indian pharmaceutical companies are in the course of revising their R&D strategy. Emulation of this strategy by the smaller companies will be the final straw. Thus the situation demands for an exigent policy revisit which will address the lacunae in the extant framework. It is imperative to address the following concerns in this policy revisit:
Does the current legal regime including the patent regime provide incentives for radical innovation? or
Is it lopsided in its approach of promoting only generic research? If yes, is this salubrious from a long term perspective?
Does the extant legal and policy framework maintain a salutary balance between addressing public health concerns and providing incentives for radical innovation?