Despite being recognised as the pharmacy of the world, India is not innovating enough in pharmaceuticals, both in chemistry and biotechnology, and it doesn't value intellectual property adequately. These have been the two key complaints against India by the developed world as far as healthcare and drug research are concerned.
And now, there is another new revelation that India is slowly but surely ceding ground to its Asian peers in biopharma innovation and manufacturing. Bernstein, a premier equity research and wealth management firm, in a recent report titled India Healthcare: An open letter to the PM
, said that the country is behind its Asian peers such as China and South Korea in biopharmaceutical innovation as well as manufacturing.
Where Is India Lagging
Bernstein’s report warns that there are multiple areas where India lags behind its Asian peers. In the report, Bernstein experts Nithya Balasubrahmanyan and Parth Shah are requesting the PM for a course correction and to set India on its path to be a powerhouse for innovation.
On India's merits, the report emphasises the following :
1. India’s domestic market is home to thousands of manufacturers providing cost-effective medicines to millions of patients.
2. Indian companies command over 40% Gx (branded generics) prescription share globally.
3. The country's vaccine dominance came to prominence during the global COVID pandemic.On the contrary India lags on the following:
1. The country’s public health expenditure at 3% of GDP, is among the lowest and has been on a downtrend since 2014.
2. Many Chinese and Korean companies invest in biomanufacturing capacities, leaving India far behind.
3. South Korea is also catching up with more biotech startups reaching global markets with their first drugs in the recent past.
4. In biopharma innovation, China has emerged as a global biotech hub.
5. India finds no mention in the Healthcare Innovation index.
6. The country does not feature in top 10 patent publications in any health-related field.
7. Among all the drugs under development, less than 2% would be developed in India.Market Economics
The Berstein letter to the PM urges that India’s market economics unfortunately don’t work for the pharma companies today. “Spending millions on clinical trials with no pricing power is not a business they want to be in. It is quite telling that the largest pharma company in India has chosen not to market their marquee innovative asset in India so far,” it said.
Even though the insurance coverage for novel drugs provided for by the government will go a long way, India needs to create a domestic market where innovative drugs can hope to command the right price and enjoy profits. Similarly, investing in core research talent, attracting quality talent back to India, easing the availability of funding for biotechs, and harmonising regulatory standards for manufacturing and clinical trials will be required for fostering innovation, the open letter to the PM appeals for.
Additionally, PLI (Production Linked Incentives) schemes and other manufacturing sops need to be extended to more capital intensive biomanufacturing to level the playing field at least initially with Asian peers, the letter requests the Prime Minister.
Conclusion
There is an almost universal consensus that the government of India must allocate more money for public expenditure and offer more support for drug research and development.
Indian companies have been predominantly the makers and marketers of generic drugs — the off-patented drugs made through reverse engineering or copy route.
However, the market economics of pharmaceuticals in India has been structured in a more pragmatic way, looking at various factors specific to the country. The access and affordability issues, a fairly large percentage of out-of-pocket expenditure on healthcare, low penetration of insurance are some of the key factors that prompt the government to keep a middle path as far as pharmaceutical pricing is concerned.
First Published: Mar 28, 2024 6:25 PM IST
