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Research Development In Pharma Industry

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Thomas A Stewart

From Intellectual Capital-The new wealth of Organisations.

R&D IN PHARMA INDUSTRY

Indian pharma industry

The Indian drug and pharmaceutical industry has made rapid strides over the years. Today the industry is manufacturing practically the entire range of the therapeutic products; it is capable of producing raw materials for the manufacture of a wide range of bulk drugs from the basic stage and a range of pharma machinery and equipment. The industry has achieved global recognition as a "low cost producer of quality bulk drugs and formulations". Leading Indian companies have established marketing and manufacturing activities in over 60 countries including USA and Western Europe. The phenomenal progress made by the industry over the years is depicted in Tables 1 & 2.

Table 1. TEMPORAL PROGRESS OF THE PHARMA INDUSTRY
Year Status
1950s Formulations Mostly imported MNC dominance
1960s Formulations Domestic endeavour on imported bulk drugs
1970s Formulations Bulk drugs Some imports.

Indigenous manufacture by domestic companies
1980s Formulations

Bulk drugs
Marginal imports (<5%)

Significant indigenous manufacture (based on domestic R&D)
1990s Formulations

Bulk drugs
Significant exports, minimal imports
(< 2%)

Self reliant (exports > imports)
Table 2. GROWTH OF PHARMA INDUSTRY

(Rs. in Million)
INDICATORS 1965-66 1994-95 1997-98 Compound growth over 94-95 (%)
Investment 1,400 12,000 18,400 53.3
R&D Expenditure 30 1,400 2,200 57.0
Formulations Turnover

Bulk Drugs
1,500

180
79,350

15,180
1,20,680

26,230
52.0

72.8
Formulations Exports

Bulk Drugs
30

30
9,240

12,607
28,050

21,730
32.9

58.0
No. of manufacturers 2,000 - 8,250 -
Source: published reports

The year 1994-95 was the turning point for the industry due to the advent of the WTO. The industry has since sought to reorient itself from looking inwards to being a player in the global arena. The thrust on R&D by the Indian pharmaceutical industry is reflected by the increased proportion of R&D expenditure to both investment and turnover.

R&D in pharma industry

Investment in R&D by industry as a whole in India has been low, only around 0.6% of the turnover. In the Indian pharmaceutical industry the average R&D expenditure is around 2% of the turnover contributed by around 150 companies. The low investment in R&D is due to the low levels of profitability and comparatively small size of the companies. However, the scenario is now changing. Some pharma companies now spend nearly 5% of their turnover on R&D. In addition to R&D in industry, substantial pharma related R&D is carried out in publicly funded research organisations, mainly by the laboratories of Council of Scientific & Industrial Research (CSIR), Indian Council of Medical Research (ICMR), around 25 universities and a few pharmacy colleges. Some of the new R&D units in industry and a few of the publicly funded laboratories are equipped with sophisticated laboratory equipment, instruments and pilot plant facilities. The R&D manpower is generally highly qualified and proficient in conventional techniques of pharmaceutical R&D.

Hitherto, R&D was largely concentrated on process development for known bulk drugs albeit through novel and innovative process routes, invariably substituting for expensive imported raw materials enhancing the productivity and efficiency of the processes, besides research on formulations and known drug delivery systems. India’s R&D forte has been in synthetic organic chemistry and process development. A few new drugs, using conventional screening techniques, have emerged from the Indian R&D, but none of them have been blockbusters.

Not much R&D is being pursued in traditional systems of medicine. Even the limited R&D is concentrated on standardisation of raw materials and final products. A few companies are now using modern scientific methods and limited biological screening as well as toxicity studies for validation of formulations.

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