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Budget should encourage indigenous innovation: Dr K M Cherian

Special purpose PE fund could be another game changer for encouraging research in healthcare sector

Dr K M Cherian, chairman and CEO, Frontier Lifeline Hospital
Dr K M Cherian, chairman and CEO, Frontier Lifeline Hospital
Dr K M Cherian
4 min read Last Updated : Apr 12 2019 | 4:04 PM IST
For this budget, I hope the central government would address a fundamental challenge in our healthcare system, which has to be addressed at a policy level. 

India depends upon import for more than 75 percent of medical device requirements and patented drugs, thus making healthcare unaffordable to the masses and losing precious foreign exchange. While we are big on generic drugs, new molecule development and patenting in the country is lacklustre. 

Data from World Intellectual Property Organisation (WIPO) shows that South Korea has 4,451 patent filing per 1 million population, Japan has 3,716 ad China has 541. Compared to these, India has 17! 

According to Scopus database, India has 4 researchers per 10,000 working people compared to 70 in the US, 58 in Russia, and 6 in Kenya. Nature magazine (May 2015 issue) reported that India’s publications generate fewer citations than countries like Brazil and China. It also stated that many Indian born scientists choose to settle overseas.

All these indicate poor performance in healthcare R&D. While we have the best of the brains in the world, these are lured by foreign companies and countries. A very limited number of enterprising scientists and researchers, who would like to do something original for the country, are faced with lack of a supporting ecosystem. 

It is very encouraging to see that the current government has come up with many new initiatives to promote scientific research in the country, including the new Biotechnology Policy. However, there is a darker side to the problem. Neither private sector, nor government is investing adequately into R&D. The long gestation period associated with healthcare R&D is the key deterrent.

In the West, pharma and biomedical sector grew, leveraging on heavy government spending and large contributions from philanthropy. While India may not be in a position to replicate this model, there are many other things that can be done.

The way forward 
The biggest support that can be given at the moment is to declare ‘healthcare research’ as an industry, which will kick-start a great development thrust for this segment. Declaring ‘healthcare research’ as an industry like any other one (for eg, like leather, infrastructure or textile) is from the rationale that each industry has its own operational limitations (like long gestation period applicable to infrastructure industry). The government may, from time to time, come up with incentives and promotional activities for ‘healthcare research industry’, just as we have done in the past for many other industries. 

A special purpose PE fund could be another game changer. Declaring ‘healthcare research’ as an industry will give indirect boost to the PE activity in this segment, if sector specific incentives could be declared.

Promoting healthcare research indigenously is fundamental to affordability. In most cases, indigenous development can bring down costs by more than 60 percent, sometimes even by 90 percent. This will also create employment and entrepreneurship in an unprecedented way and save precious foreign exchange. A few institutions in our country have already proven the point by indigenously developing devices at 1/3rd of international prices, but they had to go through unbearable difficulties to achieve this. 

By providing the right ecosystem, government will be able to push forward great progress in this field. The country can replicate our achievements in missile technology and space research in healthcare as well, substantially reduce healthcare costs and earn billions of dollars in foreign exchange.

Such a policy level initiative will pave the way for promoting indigenous innovation and reducing health care cost to the common man of our country. I believe this is the best thing that can happen for the future of healthcare in India.
Dr K M Cherian is the chairman and CEO of Frontier Lifeline Hospital
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