R&D Spending In India Is Projected To Mushroom
June 29th, 2011 // 1:10 pm @ jmpickett
Last year, the pharmaceutical industry spent about $2 billion on assorted R&D activities in India, but that figure is expected to reach a whopping $25 billion by 2025. The reasons are varied, but can be traced to expanding activities by Indian companies, additional government investment and a growing pool of qualified researchers, according to a new report by the Boston Consulting Group.
The optimistic forecast reflects declining R&D productivity in regions where such work has traditionally been conducted, notably the US and Western Europe. Already, the picture is changing. In 2002, pharma spent $25.3 billion in the US, which accounted for 83 percent of the worldwide total. By 2009, that grew to $35.4 million, but represented 76 percent of the total. There were also percentage declines in Western Europe and Japan.
In India, R&D spending rose from 0.1 percent to 1.1 percent globally. While that still trails other regions, notably Eastern Europe and Russia, pharma is increasingly eyeing India as a destination for R&D. So far, more than 70 percent of pharma execs are satisfied with their alliances there and 75 percent expect to increase activities there, according to the BCG survey of 40 big pharma R&D execs.
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Why? The single biggest reason is – surprise – low cost, which was cited by 73 percent of the pharma execs. The patient pool, including many treatment-naive patients, were noted by 70 percent. Right now, India has a significant cost advantage, with trials running 60 percent less than in the US and Europe. That margin will narrow to 35 percent in 2020 and 20 percent in 2025.
Although some 1,300 trials have been conducted in India since 2005, at nearly $1 billion, the Indian R&D sourcing market has not met expectations, failing to reach the projected $2 billion mark. Right now, sourcing is largely concentrated in chemistry and clinical research – bioinformatics, high throughput screenings and in vitro assays are services that are not as widely offered.
Of all the trials conducted in India since 2005, the vast majority were undertaken by universities and non-profit, with 306 at all phases. Among drugmakers, Pfizer ran more than any other large pharma, with 126. Trailing Pfizer was GlaxoSmithKline with 73, Eli Lilly with 63 and Novartis with 62. Taken together, big pharma accounted for roughly one-third of the overall total.
On average, Indian sites recruit patients four times as fast as global sites, notably for trials testing meds for osteoporosis, diabetes and irritable bowel syndrome. There were nearly 38,000 people enrolled in diabetes trials in India last year and that is projected to reach more than 46,000 by 2015.
But what are the obstacles to doing more work in India? Well, 42 percent believe there is no good way to measure return on investment, 39 percent point to a lack of coordination with alliance partners, 36 percent say there is insufficient support from senior management and 33 complain about differences in executing plans. Consequently, 59 percent prefer to work with just one provider across the board.
As to collaborating with academia in India, 61 percent of execs are unclear about regulatory views toward tech transfer and 48 percent remain concerned with intellectual property issues. However, compensation for scientists and academics in India has roughly tripled in recent years and government spending on life sciences grew nearly four times to more than $600 million in the past decade.
The number of papers published by Indian researchers since 1995. For instance, there were about 500 published in pharmacology and toxicology and that rose to nearly 4,000 by 2010. Of course, India trials China significantly in publishing papers across all fields. But earnings from technology commercialization for the National Research Development Corporation, the organization involved in tech transfer in India, remain low. As of 2008, royalty and licensings were less than $1 million, a level that has remain unlargely unchanged in recent years.
