While India has firmly taken its place as one of the top countries for R&D spending by multinationals across all industries, biopharma companies in the country have been increasingly active in securing their share of this interest and investment too. Recent global pressure and changes in patent protection have stimulated the local Indian pharma market to shift from its historic focus on generics to innovative drug discovery. This move, in turn, has led to an upswing in partnerships between leading Multinational Pharmaceutical Companies (MPCs) and local companies, says a recent report by The Boston Consulting Group.
According to the report, pharmaceutical R&D is slated to strike it rich in the offshore-services market in the country with a growing number of multinational pharma companies seeking to establish their R&D operations in the country. India could soon become a vital hub in the multinational pharmaceutical firms’ global R&D network.
Initially looking to access India’s proven capabilities, such as process scale up, MPCs facing declining productivity in their internal R&D departments are now broadening the scope and nature of their relationships in India. The report titled Harnessing the Power of India, however, states that these companies must decide which opportunities serve them best, as well as how to navigate those opportunities successfully.
India’s greatest attraction is its promise of near-immediate gratification for MPCs that seek to enhance chemistry-related activities and accelerate clinical trials. Because Indian vendors demonstrate established capabilities in these areas, MPCs can quickly tap into the benefits of this experience.
The report however cautions that the benefits of offshoring R&D to India come hand-in-hand with certain challenges, and MPCs that pursue opportunities in the country must also be aware of the pitfalls. Even as the country promises major cost savings, smoother-flowing pipelines and expedited clinical trials, it also exposes MPCs to several risks. The country is still struggling with the perception of weak IP protection and resource-draining bureaucracy, and a public infrastructure is already groaning under the weight of a burgeoning high-tech industry. Still, the overall risk/return profile for offshoring in India is favorable, and the challenges as hardly as alarming.
Deciding whether to engage in India is not nearly as difficult as deciding how, cautions the report. The key to any game plan in India is to determine which services best support one’s strategy and which options will foster success. When it comes to a strategy for investing in India, “one size does not fit all.” Each MPC must establish its own formula, taking into account variables such as previous offshoring experience, concerns about security and control, aversion to risk and budget. The most critical determinant of a company’s chosen approach is the nature and scope of the planned activities. Clinical trials, data management or less complex chemistry activities, for example, might be safely outsourced to an established local vendor. Advanced chemistry work or preclinical trials, in contrast, might require a local collaborator with proven end-to-end capabilities or a captive facility tooled with top-notch equipment and staff.
The report also states the importance of viewing R&D in India with a longer-term perspective. MPCs that take the long-term view will see that Indian R&D offers inexpensive custom synthesis or bio-statistics work — or even solutions to bottlenecks in the pipeline. Soon enough, the entire R&D package will be readily available in the country, and, in due course, MPCs will treat their Indian operations as another vital hub in the global R&D network.
In pharmaceutical R&D, India will no longer be considered a developing country, as its hubs acquire equal status with their European and U.S. based counterparts.
