The pandemic has cast a spotlight on India’s pharmaceutical industry, propelling rapid transformation. The industry has historically specialized in generics, but recent years have demonstrated an increasing focus on innovation, from R&D investments to innovations spanning therapeutic areas. Today, India needs these innovations more than ever. The value of these therapeutics is evident from the demand for treatments to address the pandemic and its consequences, including other pending disease burdens. India’s proven ability to produce affordable medicines is a boon domestically and globally, but so is its growing ability to innovate. This underscores the urgent need for a cohesive ecosystem that drives innovation, driven by finance, supply chain logistics, skills development and a supportive policy environment.
According to Indian Economic Survey 2021, the pharmaceutical industry is currently valued at $41.7 billion and is expected to grow to $120-130 billion by 2030. To foster growth, the industry can leverage its manufacturing strengths to pursue opportunities in new product classes, including biosimilars, therapy and specialty drugs. This advances the development of new or improved treatments that further improve safety and efficacy, are better suited to particular patient profiles and improve patient compliance. Such growth can also generate jobs thanks to the need for a qualified workforce of researchers, analysts and technicians in disruptive innovation. Over time, this can reinforce India’s status at the forefront of large-scale development of innovative solutions.
Most people think of innovation as new molecules or new treatments. These are indeed important and even vital, but an equally important and unrecognized part of pharmaceutical innovation is incremental. Such innovation includes a series of incremental advances, generating different dosage or administration options, new formulations, physiological uses or interactions of existing compounds, and improved properties of known drugs, including safety and efficiency. This results in an improvement in the quality of pharmaceutical products, enabling a patient-centered approach. Incremental innovations can be particularly important for emerging countries, as they improve the effectiveness of existing drugs, create a competitive advantage, thereby making products more affordable. This is significant in India due to its distinct disease profile, reimbursement systems and investment in R&D. Currently, India only spends 0.7% of its GDP on R&D.
To build a stronger foundation for innovation, it is essential to increase private and public spending on R&D. India ranked in the Top 50 Innovative Countries for the first time in 2020 according to the Global Innovation Index, but additional R&D spending has great return potential. The government’s plan to increase public spending on health to 2.5% of the country’s GDP by 2025 is highly anticipated, with the 135% year-on-year increase in the latest budget allocation to the health sector being a a welcome step, especially given the pillar dedicated to innovation and R&D. Such steps build confidence and will spur more investment to promote the development of high-tech products, emerging therapies and in-vitro diagnostics in India.
Along with public funding, the commitment of private funding, especially from large organizations, is vital. Going forward, reinstating the 200% weighted tax deduction to encourage in-house R&D could boost research into drug manufacturing. This should also cover spending on improving existing infrastructure, creating additional R&D centers, strengthening supply chains of critical materials, encouraging domestic pharmaceutical production, and encouraging start-ups – which encourage all private actors to invest in R&D. During the pandemic, government and private industry have had an unprecedented level of collaboration, enabling timely approvals and manufacturing continuity, ensuring an uninterrupted supply of medicines. Such collaboration, in a conducive policy environment marked by clear regulatory mechanisms, will ensure a streamlined system that supports better healthcare delivery and gives new impetus to Indian innovation. Collaborations between industry and academia can also be leveraged to fill talent gaps, contributing to the development of a skilled workforce.
A government-led push to propel data-driven innovation can give the sector a much-needed boost. Data-driven technologies help researchers understand local health needs, prompting more personalized incremental innovations. Creating a standardized digital health system and adopting electronic medical records can also generate data and inform AI and machine learning. These cutting-edge technologies have enormous potential to accelerate drug development and reduce the time it takes for innovative treatments to reach patients. With government support in creating a comprehensive health ecosystem through investments in resources, sophistication, and technology, along with supportive policies and incentives, pharmaceutical companies can introduce pioneering and accessible innovations. India can thus consolidate its position as a preferred global destination for innovation, development and manufacturing of affordable medicines.
The opinions expressed above are those of the author.
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