Pharma majors raise spending on R&D

With the product patent regime approaching fast, the pharma sector is undergoing a massive change. Companies are focusing more on research and development, generic drug design, contract research, manufacturing and clinical trials.

The pharma sector is a net export earner and self sufficient. India has the largest number of plants approved by the USFDA outside the US and has performed well in the knowledge-based industry.

"Though we have the resources for research and development, generic drug design, contract research, manufacturing and clinical trials, we need to go in for more research to take on global competition. We should be ready to adapt to the evolving global landscape. There is need to train our future generations of students in line with the best global practices," says Pankaj Patel, chairman and managing director, Cadila Healthcare Ltd.

"The pharma sector of Gujarat has done India proud. The industry has made its presence felt in the world market with its good quality drugs at competitive prices. The country presently needs setting up of excellent educational institutes to give outstanding scientists to meet the challenges that we will have after January 1, 2005," said J N Singh, secretary, department of science and technology, Government of Gujarat.

Apart from active pharmaceutical ingredients (APIs), offshoring is set to increase due to the medical billing pattern prevalent in the US. While most companies invest heavily in innovative R&D, the cost of manufacturing in the US is also on the higher side, thus pushing up prices.

In this regard, Indian companies see a bright future in offshoring for contract R&D and manufacturing generics.

"We are negotiating with various global pharma majors for contract manufacturing for APIs and formulations. With Indian drug companies setting up bases for the manufacture of APIs and formulations, most of the overseas generic companies are looking towards outsourcing from the country," says Kamlesh Udani, executive director, technical and production, J B Chemicals and Pharmaceuticals (JBCPL), a leading pharmaceuticals major in Gujarat.

In the past 30 years, Gujarat has carved an enviable position in the pharmaceutical sector. The state contributes over 40 per cent of the total pharma production of India and over 30 per cent of the country's pharma exports are from Gujarat.

However, with the enactment of the Amended Patent Act, 1970, the pharma sector will see a major change. The process patent will be replaced by product patent law. Consequently, the pharma sector will undergo a sea change in every aspect of functioning like technology, regulatory norms, market and business environment and conceivably every facet of the sector is facing major changes.