The need for a vibrant innovative ecosystem in India which establishes detailed guidelines and fosters dialogue between key stakeholders

India is home to a large base of scientists and experts who can aid India’s aim of becoming self-sufficient, be it through digitization of the healthcare sector or innovation in pharmacology through domestic R&D or ramping up manufacture of key ingredients for medicines.

Innovation in the pharmaceutical sector will require effective collaboration (amongst industry experts and academicians) and financial aid. To drive this, the following key factors may be kept in mind:

• requirement of radical changes to policy and decision making by the government to aid R&D activities and development of sustainable R&D facilities leading to a constant stream of innovation, coupled with simpler approval processes/ timelines and timely subsidies/exemptions;
• adequate funding by incentivising investment in the pharmaceutical sector;
• setting up of platforms to aid discussion and interaction between industry stakeholders which will also act as a self-regulatory system of checks and balances for progress in pharma related R&D; and
• skill development and addition to the workforce at all stages in the pharma sector to achieve a balanced delivery of pharmaceutical products and solutions domestically and internationally from the nascent stage of R&D to entry of the product into market and its commercialization.

Role of Government in creating immediate and direct impetus through initiatives such as research-linked incentives, grants, subsidies as well as higher tax aids for R&D and Incentives for investing in innovation through varied, non-traditional pathways

The Government of India has recently introduced many initiatives for the advancement of R&D in the pharma sector, including the Umbrella Scheme of the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, Government of India (DoP) namely ‘Scheme for Development of Pharmaceutical Industry’, which aims at increasing efficiency and competitiveness of the domestic pharmaceutical industry to aid India’s position in the global market and to ensure accessibility and availability of quality pharmaceuticals for mass consumption. This Scheme is comprised of sub-schemes, including, amongst others: (a) Production Linked Incentive (PLI) Scheme for promotion of domestic manufacturing of critical KSMs, DIs, APIs in India; (b) Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS); and (c) Assistance to Pharmaceutical Industry for Common Facilities (API-CF).

Of these, the PLI Scheme for promotion of domestic manufacturing of critical KSMs, DIs, APIs in India aims at enhancing India’s manufacturing capabilities domestically by increasing investment and production in the sector and contributing to product diversification to high value goods in the pharmaceutical sector. The scheme will provide financial incentives (up to a total of INR 15,000 Crore) on the incremental sales (over base year) of pharmaceutical goods to selected applicants based on pre-defined selection criteria. Incentives will be paid for a maximum period of 6 years for each participant depending upon the threshold investments and sales criteria to be achieved by the applicant.

The DoP has also recently introduced a Draft Policy to Catalyze R&D and Innovation in the Pharma- MedTech Sector in India with the objective of enabling a conducive regulatory landscape to accelerate R&D and drive targeted funding, build strong industry-academia collaboration in line with global best practices and create best-in-class infrastructure for innovation in pharma-medtech sectors. The policy aims to simplify regulatory processes to enable rapid drug discovery; to explore mechanisms to incentivize private sector investment in research and evaluate various funding mechanisms; to identify mechanisms to strengthen the R&D ecosystem through increased collaboration between industry and academia; and to enable integration of the existing policies of various departments/ institutes to develop mechanisms to dovetail research as per requirement of the industry.

Strengthen academic industry linkages, collaborating across institutions and sectors and building supporting infrastructure

It is essential to make an inclusive environment for industry experts and academicians to have a common platform for discussions on the present scenario and way forward for advancement of R&D in the pharma sector. This will facilitate the coming together of individuals collectively possessing the skills and technical expertise: (a) from the R&D end; and (b) the industry stakeholders who will practically implement the inputs received from the R&D contributors. Public-private partnerships also become extremely conducive for combining strengths from different sectors. Further, the academic- industry linkage can be done through collaborations across educational institutions and R&D facilities, supported by robust financing for maintaining platforms and infrastructure to aid such collaborations.

While many schemes have been introduced by the Government of India to achieve various ends as discussed above, their positive effect on the pharma sector in India remains to be seen, though they present a positive outlook. The ultimate aim of India becoming a global leader in the pharma sector can only be achieved if the changes suggested above are successfully implemented.

This article was originally published in Financial Express on 1 July 2022 Co-written by: Arvind Sharma, Partner; Nikita Sayam, Associate. Click here for original article

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