Indian Pharma players’ clarion call for biologics innovation

An analysis of how R&D is becoming the cynosure for Indian Pharma players

Indian Pharmaceutical industry has evolved significantly in the research and development (R&D) landscape from the imitation period of the 90's to the innovation era in the 21st century. This interesting transformation in the R&D profile attributes to the introduction of the TRIPS (Trade-Related Aspects of Intellectual Property Rights) compliant patent law by the Indian Government in the past two decades. This agreement introduced several provisions that ensured the interests of the Indian generic industry, protected the interests of the patent holder, and covered the public health with compulsory licensing systems. Under the liberal patent law regime, India has emerged as one of the leading providers of affordable generics and vaccine manufacturing hubs in the world. While the Indian Pharmaceutical industry is dominated by generics with reverse engineering of drugs invented by innovators, the transformation has started to reflect in increased R&D expenditures on next-generation therapies.

Generics drug market dynamics are on a verge of change. The current R&D and innovation capabilities of the industry are getting aligned to meet the unmet demand for new drug therapies and personalized medicine. Worldwide, the Pharmaceutical industry is an R&D intensive industry, with several large companies spending upwards of 15-20 percent of their sales on research. Over the past two decades, there has been a sizable growth in the R&D spending by Indian Pharma companies, from 2 percent to 8-13 percent in recent fiscal years. Major companies, including Sun Pharmaceutical Industries, Dr. Reddy’s Laboratories, Cipla and Lupin Laboratories have gained momentum in their R&D intensities (the amount it invests in R&D as a percentage of sales) from the beginning of the 2000s. 

Indian generic industry will continue to grow by providing fast and affordable drugs to the US and other markets. But as the market potential and revenues from the off-patent drugs start to diminish with increasing competition, leading Pharma players have increased their focus on refreshing R&D pipelines from synthetic generics to complex biologics and biotech sectors. This has resulted in an upsurge in the outsourcing of the APIs (Active Pharmaceutical Ingredients) and investing hugely in biologics, new treatment cells, and gene therapies. 

Indian Pharma companies show a positive trend especially in active therapeutic proteins, protein and antibody production, immunotherapies, and recombinant therapeutics. 

Bangalore based, Indian Biocon Biologics has a significant discovery pipeline for novel molecules, biologics, biosimilars, and generics insulin. The company targets to reach the $1 B mark by launching 8 biosimilars in the market by 2022. In addition to the development of insulins for the US, and the rest of the world, the company intends to strengthen its oncology portfolio for the regulated markets. Interestingly, Biocon Ltd. conducts sizable R&D through its partnership with EU based company Mylan. 

Other players in the space like Dr. Reddy’s Laboratories, Intas Pharmaceuticals, Zydus Cadila, and Lupin have also diversified their biologic portfolios through partnerships and collaborations. Mid-sized firms like Torrent Pharma acquired US-based Bio-Pharma Inc. (BPI) in 2018 to diversify and strengthen its product pipeline.  Another home-grown company, Lambda Therapeutics acquired Pittsburgh, the US-based Novum in 2019, which significantly expanded its dermatology portfolio. Curateq Biologics, a subsidiary of Aurobindo Pharma is exclusively focussed about developing Biosimilars business acquired from a Swiss firm, TL Pharmaceuticals. Such acquisitions help Indian companies expand into new therapeutic areas and access new markets such as Eastern Europe. 

Such interventions present a positive climate for biologics and incentivize biosimilar uptake by offering steep discounts to the producers of biologics. These international alliances with multinational companies help Indian companies import skills, finance, and technical know-how to upgrade their in-house R&D capabilities and resources. This has been historically proven to be a success mantra for innovation-based companies across the world.

India’s neighbor, China takes the lead in creating a conducive regulatory framework for the development and manufacturing of biologics. The size of its biopharmaceutical market is indicated to rank second after the US by 2020.

India must brace up the challenge to compete with China and the rest of the world. Both India and China are densely populated countries and due to the large prevalence of target diseases in these countries, epidemiology factors trigger new diseases with unhealthy lifestyle habits and increased patient pool in the next decade. Therefore, robust growth in India’s biotech industry is estimated to increase to $100 billion by 2024-25.  The domestic biosimilar market is indicated to touch $40 billion by 2030. A large part of success for Indian companies in biologics also depends on industry-academia tie-ups and favorable funding scenarios catalyzed by the Government and regulatory framework. This has become especially important in the post-COVID-19 world where timely action and quick turnaround on healthcare has become a focus area. The prevalent ecosystem around the development of COVID-19 vaccines is a quintessential case of synchronized movement between academia, companies, and regulators. On the other side of the pandemic, we are sure to see immensely positive outcomes arising out of this ecosystem. 

With the biopharmaceutical industry rapidly evolving across the globe, inorganic growth has played an important part in Indian companies’ strategy for expanding their footprints. Breaking de facto monopolies of originator biologics is a long-term strategy for Indian Pharma players to retain their market share. This will provide them a unique opportunity to diversify their product portfolio and reduce time to develop affordable biologics. The industry is headed towards generating much more value and ROI (Return on Investment) by innovating medicines instead of just manufacturing copycat versions of medicines invented elsewhere. If India can plug the gaps in the regulatory framework and policymaking, the country has a huge potential to become a leading innovation hub in novel biologics and biotech. With a substantial surge in R&D expenditures, accelerated funding, and incentives, the Indian Pharma industry is ready to reimagine innovation in the biopharmaceutical sector and novel drug therapies.