Guest Post: Requiem for a Dream?

Matthews George, our serial guest blogger from NUJS, has sent in this concise summary on an fantastic, albeit slightly dated Business World story on the state of research and development of new drugs in the Indian Pharmaceutical Industry.



Mathews George

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.

Policy concerns

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?

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5 thoughts on “Guest Post: Requiem for a Dream?”

  1. This reflects very pathetic state of affairs of S & T development not only in private sectors but also in the government R & D centers. Unless until we have focused research backed by strong patenting regimes we can not go further in any S & T or R & D efforts. For which we need working scientists like Sir CV Raman and not barking & braying scientists.
    Most of scientific technical cultures in India are habituated to sit and boss over others
    (students) for just academic interest. They even doesn’t what can be disclosed and what not, which is typical Indian mentality, and also there are too many controls over the developmental reports.

    Overall what I feel is there is some thing wrong with our S & T Policy.

  2. Even the patent offices in India do not encourage Indian scientists by not publishing the patent application data in time on the web, which adds to the fuel of the state of affairs in India S & T and R & D efforts.
    And there should be better state of affairs with dedication and will to work in the laboratory with their hands also along with others (students). You all may be knowing Edison has worked in his laboratory, Newton when he observed apple falling started thinking about it and created the theories, Einstein is also the same. For your information most of the noble laureates in S & T are strong workers.

    Today India is launching space crafts because space scientists and technologists work together which is Interdisciplinary and with good coordination.
    Once BARC / Atomic energy worked hard with very good coordination thats why they had IGR at Chennai(kalpakkam), NFC at Hyderbad and etc. presently we are importing the technologies, because we have very limited resources on N fuels. ( of course we have no other option for power generation).
    DRDO has come out good after initial typical hick ups. But changed its scenario after Dr Abdul Kalam joined it.

    Unless and until there is drastic change in our S & T policy and R & D, and equally supportive patenting regime we may not be able to excel.

  3. Dear Sir,

    You have just written what I was thinking for a few weeks now. The Indian patent act is basically geared towards the protection of the domestic generic industry. But if the grandiose vision of the Indian pharma companies of world domination is to materialize, there is an urgent need for innovative focused and core R & D efforts. However Indian companies seem to be happy with the current status quo. Companies like Novartis,Pfizer, Roche etc were buit up on core research. Unless we take strides towards such an endeavor, our pharma companies will just remain suppliers rather than be called ‘innovators’.

  4. I agree with your comments. Our framework is such that research on drug development is a mere option – a very risky costly option. When there is a less risky, rewarding option (read it as generic research), the companies are naturally tempted to go for the latter. But is this a viable trend?? What will be the situation 10-20 yrs down the line? This trend has to be reversed at the earliest. It is better late than never…Certain incentives are essential at this juncture. For instance, the govt can consider giving tax exemptions for research on new drug development.

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