Aug 2010: 2010 has been an extremely challenging year for the global pharmaceutical industry. Declining sales, poor research productivity and spiralling drug development costs, compounded by pricing pressure from national healthcare systems, have severely hampered growth and changed the dynamics of the industry. Today, there is a clear realization that dependence on blockbuster drugs in niche developed markets is suboptimal, expensive and economically unsustainable. I believe, the industry’s new growth story will be told in emerging markets, through synergistic alliances and a diversified portfolio that reflects a strong orientation towards generics and biosimilars. I also believe that there are new and exciting opportunities in innovation. Risk sharing models based on co-development of novel drugs are the new paradigm. Research services spanning discovery, preclinical and clinical development are also witnessing unprecedented growth, emanating from an inherent need to reduce R&D costs.

The escalating crisis in global healthcare is about affordability and accessibility. Whilst Western economies struggle to bear the financial burden of providing universal healthcare for its citizens, the developing world needs to provide greater access to its populations on a platform of affordability.

However, affordability is not simple to implement, it requires creative, out-of-the-box thinking. Thus to deliver affordability, we require innovation on all fronts – innovation in discovering drugs, developing therapeutics, and delivering healthcare. It is only by creating innovation in technology, strategies, practices, and policies that we can take on global healthcare challenges.

Taking innovations to the market Over the years, our company has adopted an effective strategy for innovation that involves forming symbiotic partnerships with companies around the world to create value. I started my biotech business with an Irish partner, a genesis which has engrained in me the importance of leveraging partnerships to share risks, costs and skill sets to augment and expedite development. We have since then, consciously built research and marketing partnerships in order to lower costs and gain global market access. Our collaborations have always ensured a complementary relationship where each partner helps the other fill gaps to accelerate the pace of development. Our collaborative innovation model is also driven by an underlying ethos of developing and delivering affordable drugs for patients the world over, and we have tended to forge partnerships with companies who embrace this philosophy. After all, what good is innovation if it cannot reach those who need it?

Take for example our partnership with the Centre for Molecular Immunology (CIM) in Cuba to develop and commercialize a monoclonal antibody for the treatment of head and neck cancers in India. India has an annual incidence of nearly a million such tumors, linked to tobacco consumption, largely afflicting poorer sections of the population. The affordable profile of this product has allowed thousands to benefit from a therapy that would otherwise have been out of reach.

A second monoclonal antibody is being developed as an affordable alternative to address auto-immune diseases such as rheumatoid arthritis, psoriasis and multiple sclerosis and is already showing immense promise. Cuba is an embargo-hit country with high value innovation capacity. Our partnership with CIM has been truly symbiotic and has had profound impact on each partner.

We have also developed unique collaborations with several highly innovative US biotech companies with unique platform technologies that did not have the capabilities to take their innovations to the market. For example, we have applied a proprietary technology developed by a small biotech company in North Carolina’s Research Triangle Park to develop the world’s first Oral Insulin in a tablet form. Developing such a product in India, we believe, allows us affordability to be built in.

Our partnerships with Mylan for jointly developing biosimilars, with San Diego-based Amylin for a novel anti-diabetic hybrid peptide and with Johns Hopkins start-up, IatriCa for a novel therapeutic cancer vaccine are indicative of our strong commitment to an innovation model based on collaborative co-development.

Another example of the success of such a collaborative and affordable innovation model is the process development of a novel antibiotic, Fidaxomicin against Clostridium dificile infection for a US biopharma company, Optimer Pharmaceuticals. This partnership has enabled Optimer to commercialize a best in class drug by leveraging Biocon’s cost and skill base for developing the drug product which allowed the funding of expensive clinical development required to obtain regulatory approval from US FDA and EMEA.

has been an extremely challenging year for the global pharmaceutical industry. Declining sales, poor research productivity and spiralling drug development costs, compounded by pricing pressure from national healthcare systems, have severely hampered growth and changed the dynamics of the industry. Today, there is a clear realization that dependence on blockbuster drugs in niche developed markets is suboptimal, expensive and economically unsustainable. I believe, the industry’s new growth story will be told in emerging markets, through synergistic alliances and a diversified portfolio that reflects a strong orientation towards generics and biosimilars. I also believe that there are new and exciting opportunities in innovation. Risk sharing models based on co-development of novel drugs are the new paradigm. Research services spanning discovery, preclinical and clinical development are also witnessing unprecedented growth, emanating from an inherent need to reduce R&D costs.

Affordable innovation—the only way forward
Today, the global drug industry is struggling to bring new drugs to the market. The regulatory environment has become increasingly difficult, and insurers and governments are challenged with rising healthcare costs. Affordability is now recognized as a critical factor to build sustainable models for healthcare in the context of aging populations and the need for universal coverage. For example, new drugs for Malaria, Tuberculosis, AIDS and other neglected diseases will have to be developed in developing countries if they are to reach the patients that need them. Affordable innovation is the only way forward, and India has a unique opportunity to deliver it to global markets by building excellence across the innovation chain from discovery to product and clinical development.

The impending patent cliff will see drugs worth nearly $25 billion convert to generics by 2014. Additionally, tendering practices being adopted by European Governments are causing unprecedented price discounts being imposed on patented drugs. Big pharma is re-orienting itself to these signals of change by a renewed focus on emerging markets which offer a current opportunity of $130 billion growing at an impressive 15-20 percent per annum. The recent spate of M&A activity especially in India, is indicative of the potential of this opportunity. Sanofi aventis, GSK, Abbot and Pfizer have been explicit about their generics foray while others are sitting on the fence. The hyper competitive landscape and wafer thin margins afforded by the generics opportunity are seeing a significant shift in manufacturing to India. It is a matter of time before new drug development will also see India take a greater share in the development process.