PHARMACEUTICAL RESEARCH & DEVELOPMENT

Transcription

1 CHAPTER 2 PHARMACEUTICAL RESEARCH & DEVELOPMENT The Indian pharmaceutical industry should turn their attention to invent new drugs from molecule levels and each manufacturing unit should try to become invention centres, opined Dr APJ Abdul Kalam, former President of India. 1.1 INTRODUCTION Research and Development is defined as a process of scientific approach to discovering relevant information on a specific topic. It gives new knowledge about products, processes and services that meets the gap existing in an economic or a social system. Organization for Economic Cooperation and Development (OECD) defines research and development as a creative work carried out on a systematic manner with an aim to increase the standard of knowledge and its use to develop new applications (OECD 2002). Research and development is an on-going process to revitalize the knowledge and expertise to the development a specific or new technology, improve operational efficiency and effectiveness, reduce cost and meet social and environmental challenges faced by the humanity. Technological advancement contributes to the economic progress of the nation thus creating a modern state that meets the growing needs of its people and self-sufficiency. In today s competitive world R & D is a crucial factor in determining nation s capabilities and competitiveness and the pace of technological progress is directly proportional to the efforts on R & D. Therefore, the level of R & D investment acts as a reliable indicator of country s innovative capacity. In addition, a country can be called self-reliant only when it can solve economic, social and healthcare problems of its people. Indeed, nations which constantly invest in R & D fare better and outperform others in economic development.

2 In a country, R & D is generally undertaken by the industry, academia and government institutions. However, industry undertakes R & D depend on the scientific field in which it is based and the extent of competition it faces in the sector. Though companies have their own research capabilities in-house, they also undertake collaborative research with other organizations, institutions and universities. In certain cases, they acquire technology from other enterprises through licensing or takeovers. About 84% of worldwide research for basic drug discovery comes from public institutions (Light, BMJ, 2012), and the proportion of public money only rises where life-saving drugs are concerned. It is observed that approximately twenty four percent of more than 250 drugs approved by the USFDA since 1998 to 2007 have come from public research institutions or biotechnology firms (Hadzimichalis N. 2013),later on these molecules transferred to private companies for further research and development in order to make a successful medication to be sold in the market. This confirms that the fundamental role of discovering drugs, in most cases, are initiated from the research laboratories of universities, which suggests that the transfer of technology is an important part to the discovery of new drug molecules in the world. In fact university research, in many cases, has led to the development of well-known discoveries in number of therapeutic areas. In addition, the university research has harnessed the critical research technology and chemistry skills required at the basic stage of drug development, which include different vaccines, medical equipment and utility items. While the role of large pharmaceutical companies is integral to the development of novel drugs, it is essential universities and biotechnology firms are made as part of pharmaceutical research and development. Let industry-academia collaborations represent the future of drug development and create many more novel drugs from technologies developed by these institutions. 1.2 PHARMACEUTICAL RESEARCH & DEVELOPMENT Pharmaceutical research and development (R & D) refers to the discovery of either a new drug molecule or improvement of existing molecules or processes for the effective treatment of diseases. In short, researchers use their scientific knowledge and skill to develop new molecules,

3 test new substances, evaluate existing drugs and create new dosage forms. Thus, it may say so that pharmaceutical R & D discover New Chemical Entities (NCEs), develop Novel Drug Delivery Systems (NDDS) or generic drugs. Pharmaceutical research offer promise for finding new treatments to the human race. It helps in reducing human mortality, improve quality of life and limit the spread of many communicable diseases pausing risks to public health. Research and development is the backbone of the pharmaceutical industry, hence companies should research, discover, develop, manufacture and market or distribute medications in the context of healthcare to the humanity. Industry must engage in the discovery of new drugs to solve the problem of public health. The survival of the industry critically depended on the discovery of as many new molecules as possible. Therefore, R & D is considered to be the key to the growth of pharmaceutical industry which is why investment in R & D is critical world over. In other words, the responsibility of discovery and development of newer drugs lies with the pharmaceutical industry across the world. 1.3 THE PROCESS OF DRUG DISCOVERY AND DEVELOPMENT In principle, drug research should be in the domain of medical college and of physicians who undertakes various clinical studies on patients while in their normal clinical practices. Though clinical trials were not their primary focus area of work, but they had done that with a view to provide better treatments to patients without seeking any financial benefit. A number of pharmaceutical inventions were made in these clinics by merely identifying active ingredients or by chance. Subsequently, successful drug molecules from their clinical experiments were tested in animal cells and later on human for safety and efficacy. However, approach to modern drug discovery is quite different where researchers first try to learn how a particular infection or disease is controlled at the molecular and physiological level and then targets at the symptom based on the knowledge already acquired. Researchers, with their intrinsic knowledge of chemistry, guided by pharmacology and experimental sciences have been able to make great contribution in the area of drug discovery and development. It is further noted that advancement of molecular biology coupled with genomic sciences have created deep impacts on the process of drug discovery in the world. The more recent contribution to drug

4 discovery has come from the understanding of the shape of biological molecules at atomic level, which has helped scientists across the world to design drug candidates. Despite all the advancement in understanding human biological systems, technology and research skills, the drug discovery is still find to be an enduring process plagued with challenges, protracted, and expensive preposition for the industry. It may take anything between years and billion plus dollars for a drug molecule to travel from the research lab to the patient (Mathew Herper 2012). It is because of these reasons the rate of drug hitting success is very low. However, the huge claim of expenditure for developing new drug molecule has been strongly disputed by various drug experts including Dr. Brian Druker, the creator of cancer drug (Gleevec) of Novartis. Drug Discovery Process:Discovery process begins with the basic identification of an unmet medical condition in which there is no specific treatment available to the clinical condition that motivates to initiate a research project. A research project involves various steps, starting with the identification of candidates, followed by synthesis, characterization, and screening of molecules, which then go for testing therapeutic efficacy. The data so generated helps to develop hypothesis that the inhibition or activation of a protein or pathway will result in a therapeutic effect in disease state. During this process, if a compound demonstrates therapeutic value, it will then goes from drug discovery stage to drug development. Drug Development Process: It is the scientific process undertaken to bring out a novel drug candidate into a human-grade medication after identifying the lead compound through various process of drug discovery. The drug development process can be divided into three distinct category of study: I. Discovery (process of identifying and screening compounds) II. Pre-clinical Testing (laboratory and animal studies), and III. Clinical Testing (trials on human)

5 I. Discovery: This is the first stage in which a number of compounds approximately 5,000 10,000 are identified, screened, which are then selected for further studies. II. Pre-clinical Testing: It is the function of drug development of the selected compounds prior to human clinical trials in order to assess various drug parameters like pharmacokinetics, metabolism, safety and toxicity on experimental animals in the laboratory. The other objective of pre-clinical test is to recommend the right dose and schedule to be used for the first time in a human clinical trial. In addition, the process establishes the physicochemical properties such as its chemical makeup, stability, solubility and suitability. III. Clinical Testing: This is the clinical testing stage where clinical trial processes are conducted on human beings which involve three major steps starting from Phase I to Phase III: Phase-I trials are usually conducted in a small number of healthy volunteers (approximately ) to determine the safety and dosage. Phase-II trials are conducted in sick patients (approximately ) mainly to get an initial reading of the efficacy of drug and to explore further test on the side effects of the drug to ensure safety. Phase-III trials are highly critical trials where sufficiently numbers of human subjects (approximately ) are tested to determine further about the effectiveness and the reactions to long-term use of the drug molecule. Human clinical trials are carried out to determine the long-term or chronic toxicities (fertility, reproduction, immune system, etc.), which previously was not monitored. The drug compound will undergo carcinogenicity test too to rule out the possibility of any cancer causing substance involve in it. If the compound emerges from these tests with an

6 acceptable level of toxicity and safety profile, and have demonstrated the desired effect in clinical trials, it can then be moved on to a human-grade medication. FDA Review and Approval: After successful completion of Phase III trial application stating the safety and efficacy of the investigational drug and containing all information collected during the drug development process is submitted to the regulatory authority of the country. In the US such applications are called New Drug Application (NDA), which is submitted to the FDA. Phase IV is the post-marketing surveillance and pharmacovigilance studies, in which, safety update reviews are carried out when drug is in the market and monitored to identify any unforeseen side effects. The table 2.1 below provides a descriptive representation of various drug discovery stages starting from identification and screening of thousands of compounds to clinical testing and validation, along with number of years taken at each stage. Table 1.1: Drug Discovery and Development Process Step 5,000 to 10,000 Compounds Yield 1 New Drug to Market Number of Compounds Number of Years Discovery Preclinical Study Phase I Clinical Trials Phase II Clinical Trials

7 Phase III Clinical Trials 1 FDA Review/ Approval Source: PhRMA, based on data from Center for the Study of Drug Development, Tufts University, The Drug Approval Process in India The Indian pharmaceutical industry is regulated by Drugs and Cosmetics Act 1940 (DCA). The office of the Drug Controller General of India (DCGI) deals with the matters related to clinical trials, product standards, product approvals and introduction of new drugs in the country as well as licenses for import of new drugs. The application for approvals is to be attached with the following documents. Introduction letter describing the drug and therapeutic class Information related to Clinical and pharmaceutical Animal pharmacology Animal toxicology Report of Clinical pharmacology trials conducted on Human subject (Phase I) Phase II Exploratory clinical trials reports Phase III trials on Confirmatory clinical study Special studies, if any In case imported drug the Regulatory status of other countries Post Marketing information In case the drug is already approved and marketed in other counties, then required to submit phase III studies conducted on minimum 100 volunteers in 3-4 locations in India. Suppose the drug is imported in the public interest, then DCGI may do away with the need for local clinical trials. However, the clinical trials data conducted in other countries have to be submitted for approval.

8 1.4 GLOBAL PHARMACEUTICAL R & D SCENARIO Pharmaceutical industry ranks the highest among rest of the high high-tech tech manufacturing industries in the world (EFPIA 2012). ). R & D is the mainstay of pharmaceutical industry and spends a large amount of money despite low success rate due to which the pressure on pharmaceutical companies is very high to improve R & D productivity. Companies, therefore, resorts to collaborative research with leading academic institutions as well as outsource R & D activities selectively to low cost highly skilled counties in the world. Despite good intensions, research still is a profit driven activity with number of firms engaged in developing specialist products ((Chart 2.1)) that earn more revenue to the firm while serving effluent community than poor patient with primary care products. Country like India with quality infrastructure and scientific talent must be acti active ve drug R & D to eliminate human sufferings from deadly diseases affecting the world over. Number of NCE Launches Chart 2.1 NCE Launches driven by fewer Primary Care Products Year Specialist driven Primary care driven Source:: IMS Health, New Product Focus, Jan Global Spending on Research & Development Global spending on pharmaceutical R & D has touched US$ 1.1 trillion over the last 10 year period. The estimated expenditure on R & D for 2011 stands at $135bn world world-wide, wide, which is an

9 increase of 4.9% over This clearly indicates that R & D undoubtedly is the key driver of the growth of pharmaceutical industry across the world (EvaluatePharma 2012). Among regions which spends the largest on R & D is led by USA with more than USD 40.7 billion (46%), followed by Europe with USD 37.8 billion (42%) and Japan USD 10.8 billion (12%) (EFPIA 2012). Chart 2.2 Global Region-wise R&D Spending 2010 US$ Bn Japan, 10.8, 12 % USA, 40.7, 46% USA Europe Japan Europe, 37.8, 4 2% Among Europe UK spends about $6.75 billion, Germany $6.54 billion, Switzerland $6.28 billion and rest of Europe spends $ billion. Europe accounts 5 out of top 10 pharmaceutical companies in the world in terms of sales and R & D investments. Japan is another major pharmaceutical R & D spender in the world with an expenditure of billion by the end of China is a fast growing pharmaceutical market with an increasing focus on R & D and a destination for R & D outsourcing in the world World s Leading Companies with Biggest R & D Investment The global pharmaceutical R & D composition symbolizes the largest firms dominating the global R & D investment and holds the maximum patents too.

10 The table (Table 2.2) below shows in 2010 company Merck, USA spent the highest amount (US$ 11 billion) in research and development in the world, followed by Pfizer, USA (US$ 9.41 billion) and Roche, Switzerland (US$ 8.61 billion). Whereas a number of smaller firms from the rest of the world are solely depending on manufacturing and marketing of drugs that have gone off-patent in the market, thus spends little or nil on R & D. Table 2.2: Leading Pharma R & D Spenders in the World for Rank Company Country R & D spend ($ Billions) R & D spending % to Sales 1 Merck USA % 2 Pfizer USA % 3 Roche Switzerland % 4 Novartis Switzerland % 5 GlaxoSmithKline UK % 6 Sanofi-Aventis France % 7 Eli Lilly USA % 8 Johnson & Johnson USA % 9 AstraZeneca UK % 10 Abbott USA % Sources: IMAP Healthcare Report (2011), Pharmaceutical & Biotech Industry Global Report The data below (Table 2.3) shows that the extent of money companies spent on its research and development activities that determines the success of producing more blockbuster drugs, such companies dominates the world pharmaceutical market. The table below indicates companies with their top earning products.

11 Table 2.3: Top Blockbuster Products in the World for Rank Company Country Top-Selling Drugs USD billions 1 Pfizer USA Lipitor Enbrel Lyrica 2 Novartis Switzerland Diovan/Co-Diovan Gleevec/Glivec Lucentis 3 Sanofi-Aventis France Lantus Lovenox Taxotere 4 Merck USA Singulair Remicade Januvia 5 Roche Switzerland Avastin MabThera/Rituxan Herceptin 6 GlaxoSmithKline UK Seretide/Advair Pandemic Flu Vaccine Flixotide/Flovent 7 AstraZeneca UK Crestor Nexium Seroquel 8 Johnson & Johnson USA Remicade Procrit Risperdal 9 Eli Lilly USA Zyprexa Cymbalta Alimta 10 Abbott USA Humira Trilipix/TriCor Kaletra Source: IMAP Healthcare Report (2011), Pharmaceutical & Biotech Industry Global Report Allocation of R & D Investments by Function

12 In terms of R & D allocation, clinical trials (Phase I III) required for approval of medicine consumes large chunk of research budgets (US 43%, Europe 58%), followed by pre-clinical studies (synthesis and extraction, biological screening and pharmacological testing, toxicology and safety testing, pharmaceutical dosage/formulation and stability) US 26% and Europe 25%. While Phase IV (pharmacovigilance) and other approval process uses the rest of the budget allocation (EFPIA 2002). % of Spending 100% 0% Chart 2.3 R & D Spending by Stages US 58% Europe 43% 26% 25% 7% 6% 13% 10% 11% 2% Clinical Phases Source: PhRMA, Annual Membership Survey 2012 (percentages calculated from 2010 data) Global R & D Pipeline

13 Active Molecule in the Pipeline Chart 2.4 Global R & D Pipeline Pre-reg/reg Phase I 648 Phase II Phase III Source: IMS Health, R & D Focus, Jun 2010 As per IMS Health, cancer and diabetes drugs shows long-term promise in the global R & D pipeline with great improvements in the early-stage product trials for pharmaceutical industry. 1.5 INDIAN RESEARCH & DEVELOPMENT OVERVIEW India predominantly spends very little on R & D. It is after 2005 TRIPS agreement India started looking at R & D seriously. Though there was an initial growth in the R & D spending, but it has declined considerably due to various factors (Chart 2.7). India s share to the overall global R & D investment stands very low at US$ 24.1 billion (roughly 2.1%) as per the chart (Chart 2.5) represented below.

14 Chart 2.5 Global R & D Spending 2009 India 2% China 12% ROW 15% US 34% Japan 13% Total USD Billion Europe 24% Source: Battelle, R & D Magazine However in 2012, India was the 7 th largest country in terms of R & D investments, up from 8 th largest in India is expected to retain this position in 2013, with R & D investments increasing to USD 45.2 billion from USD 38 billion in 2011 (Deloitte 2011) as shown below (Chart 2.6). Chart 2.6 R & D Expenditure in India USD Bn % % % % 0.92% 0.90% 0.88% 0.86% 0.84% 0.82% 0.80% 0.78% 0.76% 0.74% F R&D expenditure (PPP) % of GDP Source: Battelle, Aranca Research. Notes: PPP - Purchasing Power Parity, F - Forecast

15 1.6 VIEWS ON R & D INVESTMENT FROM INDUSTRY CAPTAINS In a pharma summit 2007, Dr. Swati Piramal of Nicholas Piramal, said that the value of R & D in India would be over USD1200 billion by 2050 (Express Pharma 2007). Renuka Ramnath of ICICI Venture Fund said that pharmaceutical industry is going through a tremendous change from imitation to innovation. However, she agrees innovation is the need of the hour, but R & D is considered still a high risk, high cost segment (Express Pharma 2007). The Chairman of Cadila Healthcare Mr. Pankaj R Patel stated that while there are plenty of opportunities unfolding in the pharmaceutical industry, but it is the R & D which will play a key role in leveraging India s potentials in pharmaceuticals that benefits the millions (Express Pharma 2007). Mr. Shrinivas Dempo, the CII Chairman for Western Region view that low R & D penetration in country will pose a major challenge for the industries in India (Express Pharma 2007). 1.7 PHARMACEUTICALR & D IN INDIA Despite industry s many laudable achievements in production, technology and process chemistry skills, the pharmaceutical industry in India is yet to discover a new drug molecule of marketable grade in the country. According to (Chaudhuri 2010), since 1947 Indian pharmaceutical R & D has developed 17 new drugs, but none of these drugs could find commercial success(reji K Joseph 2010). Indian companies spend very low (less than 2%) on R & D as compared to their global counterpart who spends on an average 15 per cent of their sales turnover on R & D. The chart below (Chart 2.7) shows the pattern of R & D investments by Indian companies to the percentage of their sales turnover.

16 Chart 2.7:R & D Expenditure to the percentage of Sales turnover of Indian Pharmaceutical Industry from Source: Prowess. There may be many factors responsible for the low R & D investments and intensity in the country such as (i) Indian companies were predominantly engaged in manufacturing of generic drugs, (ii) recognition of process patent enabled Indian companies to manufacture and market patented drugs conveniently using reverse engineering technology resulting less concentration on new drug development, (iii) new drug development is lengthy and expensive. However, the domestic R & D start picking up as India got closer to TRIPS Leading Indian Pharmaceutical Companies with R & D Spending during 2012 R & D is the key to pharmaceutical industry, but the combined spending on R & D inclusive of expenses for the production, generics and new drug delivery systems (NDDS) by leading Indian pharmaceutical companies during 2012 is as little as Rs crores (Chart 2.8), which is roughly 6% of Pfizer s R & D expenditure of USD 9.5 billion during 2010.

17 Chart 2.8 Pharma R & D Expenditure during 2012 Rs. Crs % 5% 9% 9% 5% 9% 13% 4% 8% 3% 6% 5% 14% 12% 10% 8% 6% 4% 2% 0% R&D Expenditure % to Sales turnover Source: Ace Equity Even the combined R & D investment of India s top 12 pharmaceutical companies during amounts to only $3.66 billion (Chart 2.9), which is only 39 per cent of Pfizer s R & D investment in a single year during The fact of the matter is that despite the introduction of strong product patent and the advantage of being a low cost country, India has not made significant improvements in R & D, particularly the new drug development.

18 Chart 2.9 Ave. R & D expenditure % to Sales Turnover from Rs Crs % 10% 11% 10% 10% 8% 8% 6% 5% 4% 4% 4% % 10% 8% 6% 4% 2% 0% Ave. Sales Revenue Ave. R&D Expenditure % to Turnover Source: Ace Equity, Pattern of R & D Investments in India The culture and belief of R & D investments across the world follow an identical pattern with a few industries leading the pack, as usual is: healthcare, computing, auto and electronics. India is no exception to this global phenomenon as the analysis of the sector wise spending outlay for the Department of Scientific and Industrial Research (DSIR), Government of India shows that among various industries, pharmaceutical sector stand in second position in terms of R & D spending (Deloitte 2011) as shown below:

19 Chart 2.10:Sector wise R & D outlay under the XI Plan, Government of India Source: Research & Development expenditure- A concept paper July 2011, by Deloitte. As per the study (Jean O. Lanjouw et.al 2005), the pattern of R & D investments and intensity by Indian pharmaceutical companies found to be heavily tilted towards specialist diseases rather than primary care treatment which are prevalent in Indian conditions. This clearly indicates a dangerous trend followed by the private sector investors of protecting profit at the cost of neglected diseases of the poor world. When profit is outdone the social good, the option before the government is to step in to save the public health of the nation before leading to serious health crisis. Hence, it is of great significance for public sector pharmaceutical companies in India to be revived and involved in active research and development of new drug molecules especially of neglected diseases with the support of the Government Indian Pharmaceutical R & D Pipeline Although, new drug research is a high-risk high-return field, the Indian pharmaceutical companies are putting their best efforts to move up in the R & D value chain to book place

20 among the innovator league. It is therefore encouraging to observe that many Indian companies are into new drug discovery process in the areas of infections, diabetes, inflammation, respiratory, obesity and cancer ailments (Table 2.4), and companies leading the pack are Dr. Reddy s, Ranbaxy, Glenmark, Piramal Healthcare, Biocon and Lupin Laboratories. Table 2.4: R & D Pipeline of Indian Pharmaceutical Companies Compound Therapeutic Area Status Dr Reddy s DRF 2593 Metabolic disorders Ongoing. Phase III Several Compounds Respiratory disorders Ongoing. Phase I DRL Metabolic disorders / Cardiovascular disorders Ongoing. Phase I Ranbaxy RBx (Arterolane) Anti-malaria combination drug Ongoing. Phase III Studies in India and Thailand Unnamed Respiratory problems Ongoing. Completed Phase I in collaboration with GSK and received related milestone payment from GSK Glenmark GRC Naturopathic Pain, Osteoarthritis & other Agonist inflammatory pain Diabetes type-2 Ongoing. Entered phase II trials GRC 8200 Ongoing. Entered phase III (Melogliptin) GRC 3886 (Oglemilast) COPD, Asthma Ongoing. Phase II Completed GRC 4039 (Revamilast) Rheumatoid arthritis, Ongoing. Entered phase II multiple sclerosis and other inflammatory disorders GBR 500* GRC Multiple Sclerosis and inflammatory disorders Osteoarthritis pain, Naturopathic Pain, Skin Disorders Ongoing. In phase I Ongoing. In phase I GBR 600* Anti-platelet, Adjunct to Ongoing. Completed

21 PCI/ Acute Coronary preclinical trials Syndrome Crofelemer Anti-diarrhoeal Successfully completed phase III. In-licensed from Napo Pharmaceuticals, USA. Biocon PEG-GCSF* Oncology Ongoing. Pre-clinical Bmab 100* Oncology Ongoing. Pre-clinical Bmab 200* Oncology Ongoing. Pre-clinical BVX-20* Oncology Ongoing. Pre-clinical IN 105 (Oral Insulin)* Diabetes Ongoing. Phase III T1h* Inflammation Ongoing. Phase II BIOMAb EGFR (Glioma, NSCLC)* Oncology Ongoing. Phase III Piramal Healthcare P 276 Oncology (head and neck cancer) Ongoing. Entered phase II. Trials are going on in India, US and Australia. P 276 combination Oncology (pancreatic Ongoing. Phase I. with Gemcitabine cancer) P 276 combination Oncology (pancreatic Ongoing. Phase I. with Radiation cancer) P 1446 Oncology Ongoing. Phase I in India and Canada NPB Bcr-Abl Oncology (chronic Ongoing. In phase II. myeloid leukemia) P 13 Kinase Oncology Ongoing. Lead selection. Microbial leads Oncology Ongoing. Lead selection. Target X - Merck Oncology Ongoing. Lead selection. Target Y - Merck Oncology Ongoing. Lead selection. NPS TNFa Inflammation (rheumatoid Ongoing. Phase II Completed arthritis) P 979-TNFa Inflammation Ongoing. In preclinical. P 3914 Inflammation Ongoing. In preclinical. IL 6 Inflammation Ongoing. Lead selection. TNFa Inflammation Ongoing. Lead selection. P 1736 Non PPARy Diabetes and metabolic Ongoing. Phase I. disorders P Lilly Diabetes and metabolic Ongoing. Phase I.

22 disorders P Lilly Diabetes and metabolic Ongoing. Phase I. disorders DGAT1 Diabetes and metabolic Ongoing. Lead selection. disorders NPH30907# - Anti-infective Ongoing. Phase I Completed Dermatophytes PP # Anti- Anti-infective Ongoing. Pre-clinical HSV2 PM Anti-infective Ongoing. Toxicity studies. MRSA/VRE Lupin LL 2011# Anti-migraine (Amigra) Ongoing. In phase III. LL 4218 Anti-psoriasis (Desoside- P) Ongoing. In phase II LL 3858/4858# TB (sudoterb) Ongoing. In phase I LL 3348 Anti-Psoriasis (Herbal Desoris) Ongoing. In phase II Unnamed Diabetes type 2 Ongoing. In preclinical Unnamed Rheumatoid arthritis Ongoing. In preclinical Source: Based on the annual reports of the companies from However, most of the R & D efforts of Indian companies are concentrated in chronic lifestyle disease segments such as cancer and diabetes, which is not a good sign when compare diseases relevant to tropical regions like India (Reji K Joseph 2010). While there are roughly about new molecules in the pipeline at different phases of clinical trials from Indian players, Dr. Reddy s Laboratories is the first Indian company to indigenously develop a New Chemical Entity (NCE) called Balaglitazone an anti-diabetic agent. However, after a prolonged phase of development spread over six to seven years in United States and Europe, the new anti-diabetic molecule has failed due to the side-effect profiles of the glitazone family compounds (DNA 2011). Dr. Reddy s has invested a large amount of money over 6-7 years to develop the anti-diabetic molecule with no success. In the case of Lupin s TB research program, the company is already in the process of terminating the program in favour of drug that give better returns such as

23 diabetes and anti-inflammatory which are globally very hot areas these days (Business World 2010) Regulatory Filing by Indian Companies with USFDA The US legislation of Hatch-Waxman Act (patent restoration act 1984) has facilitated the entry of generic versions of previously approved innovator drugs to be brought into the market. Many Indian companies have taken the advantage of this provision and made several regulatory filing with USFDA for Drug Master File (DMF) and Abbreviated New Drug Application (ANDA). This has brought a new dimension to India s exports to well established international market like US and Europe. India has made great inroads into these markets with its generic version of the inventor drugs. Drug Master File (DMF): A Drug Master File is a submission of detailed information about facilities, processes, or articles used in the manufacturing, processing, packaging, and storing of one or more human drugs to the US Food and Drug Administration (US-FDA), which may later be used to support an investigational new drug application (IND), a new drug application (NDA), an abbreviated new drug application (ANDA), export application or amendments and supplements to any of these (USFDA 2014). Abbreviated New Drug Application (ANDA): ANDA is a generic drug application termed as abbreviated because they are generally not required to include pre-clinical and clinical data to establish safety and efficacy and are only required to demonstrate the bioequivalence of the product). It s quite encouraging to find the achievements of Indian companies with respect to DMF filings and ANDA with USFDA despite there being a stringent regulatory environment. There are total 962 DMF filings and 537 ANDA approvals during 2001 to 2010 from leading Indian pharmaceutical companies as detailed below (USFDA 2014). Table 2.5: DMF Filing and ANDA Approvals by USFDA Company

24 ANDA DMF Aurobindo Dr Reddy's Ranbaxy Sun Wockhardt Glenmark Lupin Orchid Matrix Cipla Total Source: US FDA R & D BY MNCs OPERATING IN INDIA There are approximately 34 foreign drug companies operating in India, among them 15 are world s 20 largest pharmaceutical companies. Despite their strong presence, the track record of developing or introducing new drug molecules in India is very poor. However, they still command a good market share about 30 percent of the total Indian pharmaceutical market. The introduction of strong patent law saw many MNCs setting up their R & D centres in India. Currently there are more than 300 R & D Centres in India by MNC (Deloitte 2011). Although there is considerable increase in number of patents filed by MNCs post 2005 TRIPS agreement in India, the amount of patents filed for doing indigenous research in the country is somewhat at less than 20 per cent of the total patent filed (Deloitte 2011). This clearly points out that the R & D centres including MNCs are yet to produce a new drug molecule in India. According to FICCI (FICCI-ORF Report 2009), MNCs are yet to launch new products in India, but they have made investments in new production facilities and R & D centres. They are also engaged in contract manufacturing, clinical trials, and other forms of outsourcing activities in India mainly to reap the benefit of India s rich talent pool, low costs etc.

25 1.9 THE R & D ECOSYSTEM IN INDIA India is the fourth largest economy by PPP in the world. It has a healthcare market of USD 68.4 billion in 2011 (IBEF study 2013). Country has some of the finest pharmaceutical and biotech companies operating in the domestic sector with robust capability and scientific skill to develop new drug molecules. India has an enabling R & D environment with stable economic, political and legal system, quality infrastructure, excellent IT support with digital and transport connectivity, which are pre-requisite to conduct flawless drug research and development activities in the country. There are more than 150 established Clinical Research Organization who conducts various clinical studies for MNCs as well as Indian pharmaceutical companies, fair number of hospitals, physicians, nurses, diagnostic labs etc., spread across the country, which can easily support any clinical studies in the country. Despite massive infrastructure at its disposal, the drug research in the country is still at the infant stage. The table (table 2.6) below shows the statistics of India s economic advantages to be exploited for creating India as hub of drug research and development. Table 2.6: India and Its Resource Advantage Indian Statistics ( ) 1 Population 1.21 billion 2 GDP $2.2 trillion 3 GDP growth (average) 8.0% 4 Universities Key Research Institutes 14 6 Pharmacy Colleges Medical Colleges M. Pharms and PhD offering colleges 191

26 9 Pharmacy Students Medical Graduates Master and PhD students Healthcare Market $68.4 billion 13 Per capita healthcare spending $ Total Pharmaceutical Market Cr. 15 Domestic Market Cr. 16 Export Market Cr. 17 Pharmaceutical Companies Biotech Companies Clinical Research Organizations USFDA approved plants Dedicated Pharma R & D centres Researchers R & D expenditures to Sales 4.5% 24 Hospitals Health Centres Diagnostic Labs Practicing Physicians Nurses Source: GOI-DoCP annual report , IBEF 2013, CIA Fact book, CDSCO, Mediminds 2007 However, there are plenty of studies which indicate that India is significantly ahead in chemistry services such as analogue preparation, analytical chemistry, focus library, combinatorial chemistry, structural chemistry, structural drug design, computer aided drug design, high throughput screening and assay development. It lacks enough skills in biology and medicinal chemistry, which are fundamental prerequisites to undertake new drug development process (WHO Report 2006) CLINICAL RESEARCH AND OUTSOURCING SERVICES

27 Global clinical research industry is estimated to be US$ 64 billion (FICCI report on Clinical Research), witnessing key transition in the area of drug development. Due to increasing costs, declining productivity and rising drug development timelines have compelled many leading pharmaceutical and biotechnology companies to look for new and smarter ways of conducting clinical research. Emerging markets like India, China, Latin America and Eastern Europe offers great scope for clinical research outsourcing business. The Indian clinical research industry, with its strategic advantages, is estimated to be USD 2.2 billion with a high growth rate of 23% (Invest India 2012). Outsourcing in India has gradually moved up the value chain from intermediates and APIs to new drug discovery, clinical trials, marketing, and sales. A firm subcontract their clinical research activities to another firm, may be in another country, due to factors like: Time and Cost Competitiveness Clinical Research Expertise Healthcare Infrastructure Scientific Feasibility and Favourable Regulatory Environment Time and Cost Competitiveness: Sluggish sales due to patent going off in the home market, declining R & D revenues, and rising costs have made many MNCs to outsource their R & D activities to low cost destinations in the world. India offers a significant cost advantage of roughly 40-60% lower than in developed countries and around 10-20% lower than emerging economies (FICCI report on Clinical Research). It can employ more scientists and investigators at low cost. Therefore, MNCs across the world prefer to outsource their clinical trial activities to low cost countries rather than continuing in the high cost home countries. Clinical Research Expertise: India offers rich and growing pool of talented and experienced medical professional with apt chemistry and English language skills. India also achieved a tremendous record in the area of development and cost-effective chemical syntheses of different drug molecules in the country (Invest India 2012).

28 Healthcare Infrastructure: India is a favoured destination for clinical research outsourcing for MNCs due to its urban healthcare infrastructure in terms of beds/ physicians/ nurses per 1000 global average. It has high levels of compliance with internationally harmonized standards in the specific area of clinical research with respect to Good laboratory Practices (GLP), Good Clinical Practices (GCP), and current Good Manufacturing Practices (cgmp) including many US FDA approved plants. India also offers well developed communication networks with information technology capabilities (Pharmainfo.net 2010). Scientific Feasibility and Favourable Regulatory Environment: The diverse disease profile and abundance of study subjects across major therapeutic segments provides a perfect setting for clinical trials in India. In addition, a favourable regulatory environment allows a flawless conduct of global trials. Table 2.7: Clinical Trials Registered with CTRI India Year No. of DCGI approved trials Total 1548 Source:

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