- By Mr.Seemant Jauhari
Chief Executive Officer, Apollo Hospitals Educational & Research Foundation (AHERF)
The pharmaceutical industry has traditionally been driven by demands from the U.S & EU markets and the emerging markets and diseases more prevalent in these regions have been given relatively scant attention. For the past ten years many pharmaceutical companies have established low-cost research centers and also established corporate social responsibility programmes to address the neglected diseases prevalent locally. However, this has been a piecemeal approach and not a well integrated and cohesive initiative by an industry. Hence the gap between neglected diseases and its treatments still remain largely intact and overall a large section of the common man in emerging countries such as India and China still faces a huge challenge receiving affordable treatment for more prevalent diseases.
Changing Times
Almost 30% of the pharmaceutical industry’s value is accrued from the emerging markets in 2008 and their pharma markets are slated to grow by almost 14% YoY to 2013. (Source: Mckinsey). Clearly, the industry views these markets as key to their growth plans and the growing realization is that they need change their focus of R&D from just a low-cost R&D platform to R&D for understanding and treating diseases specific to these regions. Case in point being India, which is currently the global capital for diabetes and cardio-vascular disease. There is hardly any focused research done so far to find answers to what makes Indians more pre-disposed to these diseases and if the related diagnostics and treatment needs customization to address this alarming situation. In addition to the pharmaceutical market growth in India and the government spend on healthcare has also been increasing owing to the larger economic growth at over 8% YoY. The opportunity clearly exists for players to invest in R&D and more importantly the time is right.
Need and opportunity mapping
On a high level, the foremost requirement is to identify the largest healthcare needs, the fastest growing healthcare concerns and the global needs which can be addressed by leveraging strengths prevalent in India.
For the first two areas, the industry needs to cohesively plan growing an establishment of R&D centers for specific diseases. These could be captive R&D centers or collaborative entities established with the help of local institutions/ corporate healthcare groups. So far in India, R&D has mostly been conducted out of Government sponsored institutions and sporadically across some medical universities/ hospitals. Off late corporate hospital chains and leading individual hospitals have also initiated quality research.
Collaboration: The solution lies somewhere in between wherein the pharmaceutical players, the Government which has access to the common man and the healthcare delivery entities partner to invest in discrete result-oriented research specific to prevalent and growing diseases. The mapping of disease to various stakeholders and to specific projects can potentially lead to specially created vehicles wherein:
- Big pharma can fund and project manage the research projects towards discrete objectives, more cost effective and convenient medical solutions. Further, Universities should be made into a breeding ground for cutting edge research by associating with industry led research programs.
- The hospital establishment can leverage on clinical strengths such as physicians, patients, clinical data and infrastructure to compliment and expedite the research activities from a clinical perspective e.g.: trials, tissues/bio-banks, stem cells etc.
- The government
o can contribute by facilitating and partially funding provision of the innovative medical solutions to the common man through a model wherein the needy are enrolled in the programme for research and can afford the benefits.
o Further, it can facilitate VC/PE/ industry funding to universities conducting cutting edge research
Hence collaborations with specific intent will allow the stakeholders to unlock the revenue potential related to specific areas yet growing the overall R&D spend leading to innovative solutions.
Center-of-Competence Network: There are a disparate set of initiatives and establishments for research spread across multiple therapeutic segments. This involves distribution of financial, human and infrastructure resources and sub-optimal usage of such resources. Should each area of specialization be identified as a center of competence and the several establishments under the specific area be consolidated into one network for the center of competence, we shall achieve optimizing the usage of the available resources. This will also result in a more focused approach towards R&D for specific areas and depending on the individual strengths of big pharma companies, each can partner with a center of competence whilst contributing with R&D investments leveraging on existing capabilities rather than re-inventing some. E.g.: A single center service at an affordable rate for high end genetic testing, molecular and genomic testing can enable a lot of researchers to approach such a center/network for pursuing research in such cutting edge areas.
Incentivization: The Government and the industry can incentivize research in India through the following initiatives:
- Government can explore increasing the discount on high end research equipment and more tax exemptions for research initiatives.
- The industry can reward leading researchers and their projects based on an objective evaluation. Such projects can also be absorbed/ associated with larger projects ongoing within the private organizations
- Researchers must be given a clear career path and flexibility to pursue research separately or jointly with clinical practice. Here hospitals can play a significant part in encouraging physicians to conduct research safely without having to worry for loss of income.
- Government funding could also be explored for clinician driven research areas with the condition that it will be followed up by a research in another area important for public health. This will bridge the gap between need based research and clinician based research and creates a win-win situation.
International Linkages:
- More Involvement of private sector in the global research proposals especially in population and epidemiological studies
- Increasing the share of international funding secured by facilitating better knowledge management and sharing between the potential research organization, scientists, and clinicians. There are several international funding programs active however the research areas, the pre-requisites for such funding deter potential candidates.
Positioning:
- Promote special zones for healthcare related R&D akin to SEZs/ STPI parks made for the software industry.
- Planned, Sustained and comprehensive marketing campaign to the largest innovators and research entities across the world to outsource R&D to India to leverage on existing strengths e.g.: over 50% Cost savings, abundant talent, infrastructure, patients, data etc.
A multi-prong approach using a push and pull model to develop R&D in India in the healthcare domain is perhaps an imperative to involve all stakeholders and create a win-win situation for each. India needs to market its strengths vis-à-vis cost, talent, infrastructure, hospitals, generics (chemistry skills) etc to attract the largest and best research spenders. At the same time, India also needs to develop its own capabilities by enhancing the existing institutions and creating result oriented collaborations with research organizations across the globe. The knowledge and relationship management with various stakeholders will hold the key to consolidating this effort and increasing R&D investment on a sustainable basis.
