Life Sciences R&D: Changing the Innovation Equation in India · PDF fileIndian research...

Life Sciences R&D:

Changing the Innovation Equation in IndiaDelivering Affordable Innovation

Through Global Partnerships

2011

http://www.usaindiachamber.org/index.shtml

1Life sciences R&D: Changing the innovation equation in India

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Disclaimer

This position paper, commissioned by the USA-India Chamber of Commerce

(USAIC) and prepared by The Boston Consulting Group (BCG), is being

furnished to the recipient for informational purposes only.

It does not constitute a recommendation to any party. The recipient should

conduct his own investigation and analyses of the information contained in this

document. No recipient is entitled to rely on the work contained in this document

for any purpose.

USAIC and BCG make no representation or warranties whatsoever with respect

to the position paper or any of the information herein or on omissions therefrom.

Neither USAIC or BCG nor their affiliates, directors, officers, or employees

accept any liability for any damages whatsoever arising from the use of this

document or its contents.

The recipient must not reproduce, disclose, or distribute this report or the

information contained therein without the express consent of USAIC or BCG.


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Position paper prepared by BCG for release at USAIC‟s

US-India BioPharma Summit in June 2011

The USA-India Chamber of Commerce mission is to provide a

proactive and professional platform for senior business

executives, academicians, investors, and high ranking policy

makers in the US and India to network, facilitate, and promote

trade, investments, and economic cooperation. USAIC‟s four

point agenda is: Trade, Investment, Policy, and Advocacy.

In cooperation with the industry, USAIC runs the following

industry focused councils:

• Biotech, Pharmaceuticals, and Healthcare Council

• US-India Investment Council (USIC)

• CIO Council

US-India BioPharma & Healthcare Summit, held annually in

Cambridge, MA, has created an innovation driven ecosystem

bringing together all stakeholders: healthcare and life sciences

executives, investors, policy makers, and academicians. The

annual Summit has become THE Global BioPharma for senior

executives focused on Drug Discovery & Development,

Licensing, Clinical Research, External Research, Healthcare,

Innovation, M&A, Deal Flow, and Emerging Markets.

The Summit helps facilitate collaborative research

partnerships, cross border investments, public-private-

academic partnerships, and new opportunities to take

business to the next level.

The Boston Consulting Group (BCG) is a global management

consulting firm and the world‟s leading advisor on business

strategy. We partner with clients in all sectors and regions to

identify their highest-value opportunities, address their most

critical challenges, and transform their businesses.

Our customized approach combines deep insight on the

dynamics of companies and markets, with close collaboration

at all levels of the client organization. This ensures our clients

achieve sustainable competitive advantage, build more

capable organizations, and secure lasting results.

BCG‟s Health Care practice is the fastest growing practice in

BCG and the second-largest industry practice globally, as well

as the largest practice in the US. A substantial portion of our

work is with the world‟s major Pharmaceutical and Biotech

companies, but our clients also include institutions across the

entire spectrum of the health care industry, including medical

technologies, payers, and providers.

The Health Care practice consists of over 100 partners with

experience of having completed over 1,900 assignments within

the last five years.

Founded in 1963, BCG is a private company with 74 offices in

42 countries. For more information, please visit www.bcg.com.



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This Position Paper was commissioned by USA-India Chamber of Commerce and developed by BCG

for the US-India BioPharma & Healthcare Summit 2011.

The document is the culmination of a four month research effort to compile the latest trends in

BioPharma R&D sourcing and investments in India, and to analyze the opportunities for improving

R&D productivity by leveraging Indian opportunities. While the intent of the report is not to develop

detailed recommendations, we do propose a broad action agenda for different stakeholders. The

opportunity varies based on the starting position and ambition of the individual companies.

The report‟s articulation of the aspirations, potential roadblocks, opportunities, and imperatives for

Global BioPharma‟s R&D activities in India should provide the context to guide discussions among

stakeholders at the USAIC US-India BioPharma Summit 2011 to maximize the potential of the sector,

as well as act as a reference compendium for the latest state of the industry.

The report has been completed with the support of USA-India Chamber of Commerce. We would like

to especially thank Karun Rishi, President of USAIC, as well as the members of the advisory board

who participated in the research effort and helped enrich the report.

The project was managed by Bart Janssens, Simon Goodall, Sarwar Islam, and Kim Wagner, partners

in our India and US offices. We would like to recognize the contributions of Rahul Guha, Saurabh

Tayal, Kinjal Morakhia, and Gaurav Lal in developing this report. We would also like to thank the BCG

health care/innovation experts including Martin Silverstein, Valery Panier, Peter Tollman, John Wong,

Ulrik Schulze, and Philippe Guy, as well as Katie Sasser and Carolyn Noble for marketing support.

Preface


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Methodology adopted for development of the position paper

BioPharma R&D expert

interviews

• ~40 in-depth interviews

with individuals engaged in

BioPharma R&D activities

• Interviewees spanned:

– US, Europe, and Asia

– BioPharma industry,

government, academia,

and investors

Global BioPharma survey

• Survey conducted with

Western BioPharma to

identify levers to enhance

R&D activity in India

Indian BioPharma survey

• Survey conducted with

Indian research companies

to understand measures to

increase local innovation

Databases

• Use of databases

– Evaluate Pharma

– Pharmaprojects

– Datamonitor

Literature review

• Extensive literature

research including BCG

publications, analyst

reports, public resources

Interviews Surveys Secondary research


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Table of Contents

Executive Summary 6

Chapter 1: Global context and introduction 9

• Global BioPharma trends with implications for India 10

Chapter 2: India‟s potential role in addressing Global BioPharma R&D issues 15

• Overview of Indian R&D sourcing landscape 16

• Opportunities offered by India to address global challenges 19

Chapter 3: Ideas to leverage India for lowering “value invested” 20

• Enhancing scope of sourcing 22

• Establishing clinical hubs 28

• Generating greater value from collaborations 33

Chapter 4: Ideas to leverage India for improving “value generated” 37

• Developing ―nichebusters‖ 39

• Leveraging India for emerging technologies 43

Chapter 5: Stakeholder agenda and the “Inno-vision” for India 57

Appendix 62

• Meet the authors 63


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Executive summary

Global BioPharma R&D is at an important juncture today. The rate of innovation is declining, leading to

lower productivity and less innovation at higher cost. At the same time, opportunities are shifting to

emerging markets, making the ability to deliver cost-effective innovation a key success factor.

Companies are actively pursuing variabilization and externalization to complement in-house research

efforts to reduce the cost of innovation to keep up with this decline. India has emerged as an attractive

destination for sourcing R&D at lower costs, especially for chemistry and clinical research.

There still remains significant room for building upon this opportunity by expanding the scale and

scope of sourcing. Moreover, the business models can be optimized to drive closer interaction, thereby

driving greater results.

The productivity crisis, however, cannot be solved by addressing the cost aspect only. India cannot

contribute holistically to addressing the needs of the BioPharma industry unless there is innovative

drug discovery being conducted there. An initial step could be to leverage the cost advantage in India

to open up newer avenues of growth by enabling development of products previously uneconomical

for Global BioPharma. Further, in research, India can focus on emerging technologies such as

bioinformatics, nanotechnologies, and stem cell research. This would help overcome late-mover

disadvantage and build a competitive position leveraging existing strengths in IT, engineering, or

flexible policies.

While the government has taken concrete measures over the last decade to establish an innovation

ecosystem, Indian stakeholders have to accelerate their capability and capacity building to enable

Global BioPharma to develop an India innovation strategy.


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Our key belief: More to enhancing R&D productivity than

lowering costs

Innovation output as measured by

number of new molecules/

biologicals launched in market

Input resources required to bring a

single drug to market,

incorporating the cost of failure

Value

generated

Value

invested

R&D

Productivity =

Source: BCG analysis


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India offers many opportunities to improve R&D productivityHowever aspirations, business models, and commitments need to be aligned to capture value


Value invested

• Expand scope of sourcing beyond chemistry and clinical to

discovery to leverage cost arbitrage between India and

Western markets

• Establish clinical hubs in India to benefit from large

treatment naïve patient populations

• Generate greater value from collaborations by investing in

improving productivity of Indian partners to develop a low-

cost, high-quality talent pool

Value

generated

Value

invested

R&D

Productivity =

Value generated

• Leverage India‘s low cost advantage to develop

―nichebusters‖ and expand segments targeted

• Pursue emerging technologies where India has

demonstrated strengths

While improving “value generated” is a long-term opportunity,

lowering “value invested” is short-medium term

Chapter 1

Global context and introduction


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R&D productivity is on the decline

NMEs per $B R&D spent (inflation adjusted)

Structure of

DNA

Restriction

enzymes

DNA

sequencing

Recombinant

DNA

Human

insulin

Dolly the

Sheep

Human

genome v1

FDA tightens regulation

post thalidomide

FDA clears backlog following

PDUFA regulations and

perhaps relaxes on HIV drugs

0.1

1

10

100

1950 1960 1970 1980 1990 2000 2010

Note: R&D costs are estimated from PhRMA annual survey 2009; NMEs are the total number of small molecule and biologic approvals by the FDASource: Bernstein Research ―The Long View – R&D Productivity‖ (September 30, 2010)


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Decline in R&D productivity is driven by both a fall in value

generated and an increase in value invested

Value invested

• Clinical timelines are increasing

• Success rates are declining and have halved since 1990s

• R&D costs are rising, with a three-fold increase over the

last decade

Value

generated

Value

invested

R&D

Productivity =


Value generated

• Number of drugs submissions for regulatory approval has

been flat

• Higher regulatory hurdles, lowering drugs approved

• Downward trend forecasted in peak sales


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Pipeline approved till 2007 (%)

50

40

30

20

10

0

Year of pipeline snapshot

-12%

20022

15%

1997

28%

Lower innovation, higher regulatory hurdles and reduced

sales realization are driving lower “value generated”

N=116 N=86

N = xx # Approved drugs

Average peak sales ($M)

1,500

1,000

500

0

Year of launch

2013

264

2012

418

2011

687

2010

707

2009

977

NME1 applications submitted

60

40

20

0

Year

2010

23

2009

37

2008

34

2007

35

2006

26

2005

38

1. NME – New Molecular Entity (includes NDAs and BLAs) 2. Full pipeline lifecycle data required hence the age of the sample.Note: Analysis includes chemical new molecular entities that were in Phase II to pre-registration pipeline in 1997 and 2002 respectively. Approval till 2007 has been considered for both 1997 and 2002 pipelines. Does not include biologics.Source: CDER - FDA, Parexel Bio/Pharmaceutical R&D statistical sourcebook 2010/11, Evaluate Pharma, BCG Analysis

Declining approvals

for new chemical entities

Downward trend

forecasted in peak sales

Drugs submitted

for approval has been flat


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00s

Mean development time in years

8

6

4

7.4

90s

6.3

80s

5.5

70s

4.4

60s

2.5

Year

10s

0

2

7.2

Increasing development time and declining success rates

are escalating “value invested”

69% 46%

28%

66%

56%

86%

93% 9%59%

18%

Ph

as

e I

Ph

as

e II

Ph

as

e III

Ph

as

e IV

Lau

nc

h

1990s

2000s

Cumulative success rate

3,000

2,000

1,000

0

202020102000199019801970

Cost per molecule (incl. cost of failure) ($M)

4,000

1979

$100M

1991

$300M

2000

$800M

2010

$2300M

20151

$3800M

1. Theoretical extrapolation at historical CAGR of 10.6%Source: Tufts CSDD; Perexel Bio/Pharmaceutical R&D statistical sourcebooks; CMR; BCG analysis

Expanding clinical timelines Deteriorating success rates Rising R&D costs


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Pharma

Co

Variabilization is pursued when work can be

more efficiently distributed to network

partners than performed in-house• Need for transforming fixed costs into variable

costs as cost of drug development is on an upward

trend

Diversification is pursued within a company

to broaden its portfolio• Increasing importance of a broad diverse portfolio

as more and more payers look for low-cost

generics and preventive vaccines as complements

to innovative pharmaceuticals

1

2

Externalization is pursued to diversify

efforts and share risk with partners• Access to alternative sources of innovation to

complement in-house output as R&D productivity

is on the decline

3

2

3

Global BioPharma companies are adopting a variety of

approaches to improve R&D productivity

1


Chapter 2

India‟s potential role in addressing global BioPharma R&D issues


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Share of PhRMA Member R&D outside US (2002 vs. 2009)

Share of India in global R&D spending increased by more

than ten times between 2002-2009

Note: R&D outside US includes expenditures outside the United States by US-owned PhRMA member companies and R&D conducted abroad by the US divisions of foreign-owned PhRMAmember companies. R&D performed abroad by the foreign divisions of foreign-owned PhRMA member companies is excluded. Domestic R&D, however, includes R&D expenditures within the United States by all PhRMA member companies.Source: Pharmaceutical Research and Manufacturers of America (PhRMA) Industry Profiles 2011 and 2004, BCG analysis

2009

1.1%

2002

0.1%

Share

Industry R&D

spending

in US ($B)

2002 2009

25.7 35.4

83% 76%

Rest of Europe

„02 - 2.0%

„09 - 8.3%

Western

Europe „02 -

73.1%

„09 - 68.9%

Middle East

and Africa

„02 - 0.7%

„09 - 1.5%

Other Asia Pac

„02 - 1.5%

„09 - 4.7%

Japan

„02 - 13.2%

„09 - 6.1%

Australia and NZ

„02 - 1.5%

„09 - 1.6%Latin

America

„02 - 2.1%

„09 - 3.7%

Canada

„02 - 5.7%

„09 - 4.0%

India

Industry R&D

spending

outside US ($B)

2002 2009

5.3 11.0

17% 24%


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15

Moderately satisfied 42

Satisfied 30

Very satisfied 0

Respondents (%)

100806040200

Total 100

Not satisfied at all 12

Minimally satisfied

Global BioPharma expect to increase R&D activities in India

as existing R&D alliances have delivered satisfactory results

Source: BCG US and Europe Pharma companies Survey Mar 2011 (N = 33)

~75% of respondents expect

to increase R&D activities in India

Level of satisfaction for Global Pharma

with current R&D partnerships in India

>70% of Global BioPharma executives

satisfied with R&D alliances in India

Respondents (%)

100806040200

Total 100

Reduce significantly 3

Reduce somewhat 3

Stay the same 18

Increase somewhat 55

Increase significantly 21

Expected change in level of R&D

activities in India by Global Pharma


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However, Indian R&D sourcing market has not grown

as per expectations

Source: Frost &Sullivan projections quoted by India Brand Equity Foundation and other press articles 2007, Avendus Capital report on Pharma, January 2011, Frost & Sullivan website, BCG analysis

At ~$0.9B, the Indian R&D sourcing industry in 2010 is half of what it was projected to be

0.5

0.0

Current

0.9

Indian R&D sourcing market in 2010 in $B

2.5

2.0

1.5

1.0

Projected

2.0


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India offers many opportunities to improve R&D productivityHowever, aspirations, business models, and commitments need to be aligned to capture value


Value invested

• Expand scope of sourcing beyond chemistry and clinical

to discovery to leverage cost arbitrage between India and

Western markets

• Establish clinical hubs in India to benefit from large

treatment naïve patient populations

• Generate greater value from collaborations by investing

in improving productivity of Indian partners to develop a

low-cost, high-quality talent pool

Value

generated

Value

invested

R&D

Productivity =

Value generated

• Leverage India‘s low cost advantage to develop

―nichebusters‖ and expand segments targeted

• Pursue emerging technologies where India has


4a

4b

3a

3b

3c

X refers to Chapter number and

y to sub-section in this reportXy

While improving “value generated” is a long-term opportunity,

lowering “value invested” is short-medium term

Chapter 3

Ideas to leverage India for lowering “value invested”


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Summary: Ideas to lower “value invested”

Enhance scope

of sourcing

Expand sourcing beyond chemistry and clinical research to sourcing discovery

activities to leverage cost arbitrage across the value chain

• MNCs have expressed satisfaction with sourcing from India and expect an increase

in activities but sourcing is largely concentrated in chemistry and clinical research

• Indian research providers have invested in building capabilities across the value

chain and the experience of companies with novel drug discovery in India has been

positive

Establish

clinical hubs

Leverage India‟s clinical offering to conduct cost effective Proof of Concept

facilitating greater innovation at the same cost

• India has a demonstrated track record with ~1,300 clinical trials conducted since

2005

• Large treatment naïve patients pools drive a 4x faster recruitment of patients

• Cost per patient is half in India as compared to Western countries

Generate

greater value

from

collaborations

Transition from a vendor model to a collaborative partnership

• Investment in partner development and long-term commitment identified as critical

success factors to delivering innovation

• Transactional vendor model may be suitable for extracting cost-based value, but is

inadequate for conducting innovative activities

3a

3b

3c


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73

Respondents (%)

8040 60200

Capabilities in new TAs 15

Talent 48

Infrastructure set-up 52

Data mgmt / informatics 55

Access to patient pool 70

Low cost

Global BioPharma still leverages India largely for

low cost activities

―Which of the following capabilities do you expect your

industry R&D partner(s) in India to bring to your relationship?‖

Source: BCG US and Europe Pharma companies Survey, Mar 2011 (N = 33); Expert interviews

3a

“For us, the reason for sourcing from India is not to generate new IP.

It is driven primarily by cost differential.”

- SVP R&D, MNC biotech company


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Sourcing from India concentrated in chemistry and clinical

research; some emerging collaborations in biology

Biology Research – Chemistry ClinicalPre-

clinicalTarget

identification

Target

validation

Compoundgeneration

& assay dev Screening

Lead

optimizationPh I Ph II Ph III Data mgmt

Syngene,

Divi‘s

Ranbaxy

Tata Consultancy Services

Advinus

Aurigene

Divi‘s

Jubilant

Syngene

Captive

In-house

Aurigene

Jubilant, Syngene Jubilant

Jubilant

Captive research and process center Biocon

Suven Tata Consultancy Services

Piramal

Strands Zydus

Jubilant JV with Jubilant (Vanthys)

Biocon BMS Research Center Accenture

Captive centre

SiroClinpharm, Cognizant, Biocon

TCG Life Sciences

GVK BIO

SAI Advantium

Source: Literature review, BCG analysis

3a


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2025202020152010

Costs indexed to 2010 costs for US/Europe

200

150

100

50

0

~50%

~20%

~35%

~60%

Cost advantage is likely to remain significant at least for the

next five to ten years

IndiaUS / Europe

Assumptions: Increase in labor costs for R&D is same as overall wage inflation; overhead costs are not included in the above calculations.Source: EIU, Expert interviews, BCG case experience, BCG analysis

3a


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Less common service offerings, limited collaborations reported

Significant potential exists to increase depth and breadth of

activities sourced from India


Most common service offerings, multiple collaborations reported

Emerging service offerings,hardly observed

Medicinal chemistry (SAR)Combinatorial chemistry

and library generation

Preclinical

development

Lead

optimization

Lead

generation

Assay

development &

HT screening

Target ID &

validation

Intermediates and scale-up

Toxicology

Research PK Preclinical DMPK

In vivo pharmacology (animal models)

In vitro assays and cell lines

Bioinformatics

Protein expression

Protein crystallization and X-ray

Computational chemistry and structure-based design

Natural products (extracts and lead structures)

Structural biology

Target validation(animal models)

High Throughput screening

3a


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Indian research companies have invested in broadening

service offerings across the value chainC

ap

ab

ilit

y o

f In

dia

n r

es

ea

rch

in

du

str

y

Custom

synthesis &

manufacturing;

analytical

services

Medicinal and

combinatorial

chemistry

Pre-clinical and

toxicologyClinical research

and data

management

Source: Company websites, BCG analysis

Time frame

Illustrative

Informatics and

genomic

applicationsMolecular

modeling and

molecular biology

Widely available

services

3a

http://www.suven.com/default.htm

http://www.veedacr.com/

http://www.ecronacunova.com/index.htm

http://www.gvkbio.com/index.php

http://www.aurigene.com/index.php

http://www.tcgls.com/index.htm

http://www.suven.com/default.htm

http://www.google.com/imgres?imgurl=http://www.valuenotes.com/uploads/company/img_1701001500Rallis_logo.gif&imgrefurl=http://www.valuenotes.com/Investment-Strategy/Rallis-Buy-for-a-target-of-Rs1765/171519/17010015.00/C&usg=__Ptqy6PLZQJgMWFQwnx0MNRJpeuM=&h=112&w=112&sz=3&hl=en&start=2&zoom=1&um=1&itbs=1&tbnid=hhlUxQBfOp_pHM:&tbnh=86&tbnw=86&prev=/search?q=rallis+logo&um=1&hl=en&sa=N&rls=com.microsoft:en-gb:IE-SearchBox&biw=947&bih=513&tbm=isch&ei=47fTTZezB8f0sgbIyKDkAg

http://www.advinus.com/index.asp


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Several companies have sourced early discovery activities

from India and have expressed satisfaction with results

Source: Expert interviews, Press releases, BCG Analysis

3a

“Our partnership in India has exceeded expectations. We were initially planning on

conducting only some back-up programs in India, but now we are doing novel drug

discovery.”

- VP R&D, Global BioPharma

“Our collaboration has resulted in the identification of promising pre-clinical candidates in

important therapeutic areas.”

- SVP R&D, Global BioPharma

“We have been impressed by the quality of the science and the progress made to date by

the Indian partner team on our ongoing discovery program.” - VP R&D, Global BioPharma

Extension of existing agreements and increase

in scope bears testimony to satisfactory results


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India is emerging as a popular clinical trials destination ~1,300 global clinical trials conducted since 2005

Novo

Nordisk

26

Amgen

37

Biogen

Idec

40

BI

43

AZ Merck

20

Bayer

20

Roche

22

Number of global trials with sites in India

(Total between Jan 2005 and Jan 2011)

400

300

200

100

0

Others

390

Abbott

16

43

BMS

49

SA

52

Novartis

62

Eli Lilly

63

GSK

73

Pfizer

126

Univ./

Non

profit

306

Note: GSK – GlaxoSmithKline, SA – Sanofi Aventis, AZ – Astra Zeneca, BMS – Bristol-Myers Squibb, BI – Boehringer Ingelheim; Phase I/II clubbed in Phase II, Phase II/III clubbed with Phase IIISource: ClinicalTrials.gov

Phase IIPhase IIIPhase IV Phase I

3b


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Examples from vendor case studies

Indian sites recruit ~4 times faster than average global sites

Note: H&N – Head and neckSource: Company interviews, BCG analysis

Number of patients/site/month

5

15

10

0

Ulcerative

Colitis

Irritable

Bowel

Syndrome

StrokeDiabetesOsteoporosis Myocardial

Infarction

Non-Small-

Cell Lung

Carcinoma

H&N CancerMetast.

Breast

Cancer

Global sites

Indian sites

3b

On average 4x faster recruitment in Indian sites

Indication-specific speed ranges between 2x and 6x


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Faster recruitment is driven by presence

of large patient populations

Diabetes Cancer Coronary heart disease

Patients (#K)

50,000

40,000

30,000

20,000

10,000

0

2015

45,809

2010

37,672

500

1,500

1,000

0

2015

1,061

2010

980

Patients (#K) Patients (#K)

80,000

60,000

40,000

20,000

0

2015

61,522

2010

46,969

Source: Datamonitor National Health Profile 2009

3b


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Observed benefits generate several opportunities to

explore

Lower unit cost

Indian cost/patient is less

than half of global cost

Accelerating PoC1 go/no-go decisions at same total

cost• Opportunity to conduct twice as many PoC trials at same

total cost

• Opportunity to reduce global bottlenecks in conducting PoC

trial due to significantly faster recruitment

• ―Increased ability to recruit ‗treatment naïve‘ patient

populations to drive more robust Proof of Concept

decisions.‖ - President, R&D, Global Pharma

Faster recruitment

Speed of recruitment in

Indian sites is ~4 times

faster than average global

sites

Improving feasibility and economics for “nichebuster”

development• Faster patient enrollment than developed countries for rare

diseases at lower cost

• US-based MNC conducted study on an orphan drug

indication ―Ophthalmology/Uveitis‖ with ~50% patients

recruited from India

• OneWorld Health got approval for Paromomycin

Intramuscular injection for treatment of Visceral

Leishmaniasis with 100% patients recruited from India

Large diverse patient

pool

Large availability of

treatment naïve patients

1. PoC = Proof of ConceptSource: BCG analysis

3b


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Models are emerging where Global BioPharma partners

with an Indian research company for cost-effective PoC

Probability of technical success (%)

100

90

80

70

60

50

40

30

20

10

0

Year 5Year 4Year 3Year 2Year 1

Source: In Vivo, May 2007, Company website

First human dose

Single dose

Safety study

Multiple dose

Safety study

PoC

First efficacy dose

PoC

• Longer time

• Higher costs

Working model of Vanthys Vanthys overview

Vanthys Standard industry program

• A 50:50 joint venture between Eli

Lilly and Jubilant

– Focused on establishing clinical

PoC as quickly and

inexpensively as possible

• Modeled after Chorus, an

autonomous unit of Eli Lilly, which

provides fast and efficient drug

development by leveraging external

contract partners

• Chorus is considered a successful

model and has been replicated

through Vanthys and Chorus

Resonance

3b

http://vanthys.net/index.shtml


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“There is a need to transition from a vendor-

based approach to true partnerships.

Partnerships need to have a more strategic

imperative.”– VP R&D, Global Pharma

“If an organization is just looking to source R&D

with no interaction, then the partnership will not

succeed.”– CEO, Indian contract research firm

“A model where a company is asked to develop a

drug and not given any support does not work

and is doomed to fail by its structure.”– CEO, Indian drug discovery company

Partnerships are gaining

in prominence globally…

…and a similar trend is expected in

India

There is a global move from sourcing models

to collaborative partnerships

Note: Figures exclude ‗don't knows,‘ blanks, ‗not outsourced‘ or partnerships between major PharmacosSource: BCG survey to top BioPharma companies conducted in ‗08/09, Expert interviews, BCG Analysis

Disc.Pre

Clinical

Pharm.

Devt.Clinical

Regul-

atory

Overall sourcing mix of external work (%)

100

80

60

40

20

0

47%33%11%

23%

26%

Vendor / transaction model

Partnering / Risk sharing

In-licensing

Academic networks

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% Respondents

604530150

Not enough great ideas 12%

Selecting the right

ideas to develop15%

Long development

timelines18%

Difference in execution

approach33%

Insufficient senior

management support36%

Lack of coordination with

alliance partners39%

No good way to measure

ROI accurately42%

Evolution from sourcing models toward collaborative

partnerships in India will help resolve bottlenecks

Source: BCG US and Europe Pharma companies Survey, Mar 2011 (N = 33), Expert interviews, BCG analysis

Obstacles faced by Global Pharma

in partnering with India

Need for better coordination and

agreed-upon execution approach

What obstacles do you face in

your R&D partnerships in India?

3c

“There has to be mutual agreement on execution

approach upfront and frequent communication

throughout the collaboration. Just giving a

problem and expecting an output at the end

will not work.”- SVP, Global Biotech

“The success of any collaboration lies in

commitment, knowledge sharing and shared

vision on both sides.”- MD, R&D centre, Global Pharma

“Commitment from Global Pharma at a senior

level is most important for partnerships. Unless

someone very senior like the CEO or head of

research supports it there will be resistance

internally.” - EVP R&D, Global Pharma


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Investment in partner development and commitment from

senior management critical to successful partnerships

Investment in

capability

building

―What will we

get out of this?‖

Long-term

commitment

from senior

leadership

―What do we

need to invest?‖

Shared

agenda

―What are we

looking for?‖

Source: Expert interviews, BCG analysis

3c

“A partner needs to bring a sustainable value proposition (technology,

capability etc). We are looking for a partner for drug discovery and not just a

low cost option.” - SVP R&D, Global Pharma

“Our productivity is one of the highest in the Global Pharma‟s R&D network.”- CEO, Indian drug discovery company

“It is important to ensure incentives are in place for the partner. We are helping

our partner develop world class capabilities.”- SVP R&D, Global Pharma

“Successful relationships are ones where we realize we need to invest early and

often, sometimes even put people on the ground. Efforts spent in educating the

partner have paid off.” - SVP R&D, Global Pharma

“The senior leadership teams have a strong working relationship, which is very

important to getting things done.”- SVP R&D, Global Pharma

“Unless someone senior enough supports the partnership, there will be

resistance. It is equally important to have commitment across levels.” - SVP R&D, Global Pharma


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Two kinds of partners are preferred by Global BioPharma:

Integrators or specialists

Source: Jefferies CRO Survey 2007, expert interviews, BCG analysis

Would you prefer to use several best-in-class providers for

a project or one full service firm?

0

41

59

25

100

One provider

with solid services

across the board

Respondents (%)

75

50

Several

best-in-class

providers

3c

“Initially we used an integrated service provider

because it is more convenient. However, it is

difficult for one CRO to be the best at everything

and we now work with several best in class

players.”– SVP R&D, Global Pharma

“There is clearly some benefit to scale and this

has probably dominated Pharma companies‟

preference to invest in few relationships.”

– VP R&D, Global Pharma

Chapter 4

Ideas to leverage India for improving “value generated”


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Summary: Ideas to improve “value generated”

Develop

“nichebusters”

Pursue opportunities previously uneconomical for Global BioPharma

• Current R&D model is too costly for development of ―nichebusters‖

• By combining early stage expertise of Global BioPharma with Indian service

providers‘ ability to bring innovation to market cost effectively, newer diseases can

be targeted

• Indian BioPharma developing innovative products in India could adopt a network

approach to optimize business model to deliver innovation faster and cheaper

Leverage

research

capabilities in

emerging

technologies

Tap India for emerging technologies where India has a competitive advantage

• Potential early mover advantage in technologies of the future

• Several new technologies are closely linked to information technology and

engineering where India has established strengths

– e.g., Bio-informatics, Nano bio-technology

• Further, India offers a policy environment where research can take place in select

areas

– e.g., Stem cell research

4a

4b


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Current R&D model is not suitable for “nichebusters;”

need for a low cost strategy to pursue these opportunities

Global Pharma looking for partners

for developing “nichebusters”2

Only 20% of drugs launched

by Global Pharma meet R&D costs

1. After-tax average PV of sales is ~$363M 2. Niche-busters refers to drugs for diseases with limited patient population 3. PoC – Proof of ConceptNote: Drug development costs represent after-tax out-of-pocket costs in year 2000 dollars for drugs introduced from 1990–94. The same analysis found that the total cost of developing a new drug was $1.3B in 2006. Average R&D costs include the cost of the approved medicines as well as those that fail to reach approval.Source: J. Vernon et. al., ―Drug Development Costs when Financial Risk is measured using the Fama-French Three Factor Model,‖ Unpublished Working Paper, 2008; J. DiMasi andH. Grabowski, ―The Cost of BioPharmaceutical R&D: Is Biotech Different?,‖ Managerial and Decision Economics, 2007, expert interviews, BCG analysis

After-tax present value of sales1 (M of year 2000 dollars)

2,000

1,500

1,000

500

0

-500

10987654321

New Rx drugs introduced between 1990-

1994, grouped by Tenths, by lifetime sales

After-tax average R&D

out-of-pocket costs

Need for low cost player with end-to-end

capabilities to make development of “niche-

busters” economically viable

4a

“We have projects with potential for success

which have been de-prioritized for cost reasons.

We are looking to monetize some of these

opportunities by partnering.”

– VP R&D, Global Pharma

“We are partnering with a Chinese company till

PoC.3 We retain the right to global

commercialization and the partner retains rights

to the local market.”

– SVP R&D, Global Pharma


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Indian Pharma strongly placed to take up

niche innovation programs

Competencies required from partner

playing to India‟s strengths

India with ~60% cost advantage

over traditional model

Global Pharma

Validated targets provided by

Global Pharma

Indian Pharma

Lead optimization to Proof of

Concept stage

Commercialization in India if

project is successful

10%

20

-60%

Drug discovery &

development in

India

Percentage

100

80

30%

60

Traditional

Global pharma

model

0

40

26%

74%

Cost of successCost of failure

Source: Expert interviews, Literature review, BCG analysis

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Network model can help Indian Pharma in bringing

“nichebusters” to market cost effectively

What does the network model

look like in the Indian context?

What are the benefits

for Indian Pharma?

• Network of best practice partners with one

company as coordinator

• Focus on core capabilities, e.g., lead generation

to pre-clinical compounds; partnerships pursued

for targets and clinical studies

Pharma/Biotech

Licensing/ Patent

Experts

Govt. Agencies

AcademiaScientific Experts

Clinical/ Preclinical Suppliers

Lower funding needs

Source: Expert interviews, BCG analysis

Adoption of risk sharing models with partners can

help reduce funding required to pursue a single

molecule, thereby enhancing success rates

Higher efficiency

Sourcing from players with greater volumes allows

Indian company to benefit from scale and best

practices of external partner

Better quality outcomes

Sourcing from best-in-class players drives better

quality outcomes; highly unlikely that a single

company can be the best across activities

IndianPharma

4a


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Parallels exist globally in Pharma; smaller companies are

adopting network model to manage constraints

Biotech companies

Example: Vertex

pharmaceuticals

• Network of partners

developed to tap the best

talent

• Platforms established to

enable partners to

communicate directly with

each other to map inter-

dependencies

• Incentives usually include

license fee, royalties, or

milestone payments,

based on the partner

Venture capitalists

Example: TVM capital for

portfolio companies

• Virtual asset development:

No investment in internal

infrastructure

• Single asset focus: Fixed

investment committed to

developing single asset to

Proof of Concept stage

• Early partnering: Asset

development through

partners

• Option deals: Risk shared

with partners

Small Pharma

companies

Example: Dr. Reddy‟s

Laboratories

• In-house R&D unit spun

out and merged with 100%

owned subsidiary,

Aurigene

• Focus on in-licensing and

out-licensing

• Work given to partners

with strongest capabilities

with no preference given to

Aurigene

• Payments to partners

based on milestone and

share of royalties

Source: TVM website, expert interviews, BCG analysis

4a


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Government is actively establishing an innovation ecosystemHistorical barriers are being addressed

Historical barriers to India-based

life science innovation

Key actions of government to

establish ecosystem

Intellectual property regulation and government

policies:

• Introduction of product patents in 2005

• Drafting of Indian Bayh-Dole act; awaiting approval in

parliament

• Policies permitting faculty to hold executive positions

in start ups

Infrastructure:

• Creation of bio-parks and educational institutions

Funding:

• Increase in government funding for research

• Industry funding programs

• Government-backed venture capital funds

Talent:

• Increase in compensation for academics

• Repatriation programs for overseas researchers

15

12

No big success story

9

Long gestation 18

Difficult to manage partners 24

Funding shortage

Lack of talent

Respondents (%)

706050403020100

Others

30

Lack of Infrastructure 52

Company culture not

fostering innovation52

Intellectual property regulation

not supportive61

27

Govt policies not supportive

Source: BCG US and Europe Pharma companies Survey, Mar 2011 (N = 33), Press search, BCG analysis

4b


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India can be leveraged for emerging technologies where

India has an advantage

Focus on new technologies that are

extensions of areas in which India has


Select emerging technologies where Indian

regulatory environment is more

accommodating than Western markets

Source: Press search, BCG analysis

The National Institutes of Health announced that it

has suspended funding new human embryonic stem

cell research and that all federally funded

experiments already underway will be cut off when

they come up for renewal if a new court order is not

overturned. The announcement—which confirmed

fears among proponents that the ruling would result

in a comprehensive freeze in federal support for

stem cell research—came in response to a court

order Monday barring the government from funding

the research because it involves the destruction

of embryos.

– Press search Aug. 2010

Guidelines for Stem Cell Research and Therapy

have been prepared for adult, cord blood and

embryonic stem cells in response to the support

provided by the Government to facilitate stem cell

research in India so as to improve understanding of

human health and disease, & evolve strategies to

treat serious diseases

– Press search Aug. 2010

Bio-

informatics

Nano bio-

technology

Information

Technology

Life Sciences

Engineering

4b


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Bioinformatics: India is leveraging IT skills

to develop centers of excellence

Source: Bioinformatics Policy of India 2004, Value notes, Department of Biotechnology, Literature review, BCG analysis

Bioinformatics networkIndia was one of the first countries in the world to establish a nationwide bioinformatics network

Biotechnology Information System Network (BTIS) connects 57 key research centers, covering the entire country

DatabasesMore than 100 databases for biotechnology have been developed

Efforts are being made to ensure availability of secondary and tertiary databases and knowledge resources

Six international databases pertaining to genomics and proteomics have been mirrored under National Jai Vigyan Mission

Talent pool20+ M.Tech. and 10+ M.Sc. bioinformatics courses to be introduced in various prominent institutions

300+ colleges offering courses in biotechnology, bioinformatics, and biological sciences

Vendor landscapeOver 200 companies with some bioinformatics play

Pure bioinformatics companies like Strand Life Sciences, Molecular Connections, VLife Sciences, Cytogenomics, LabVantage

IT companies like Infosys, HCL Technologies, TCS, Mphasis, IBM

Domestic companies with focus on CRAMS like Jubilant Biosys, Avesthagen, GVK Biosciences

4b


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Nano biotechnology: Indian government is investing

in developing a research ecosystem

Basic research

• ~130 projects supported by individual

scientists mainly working on

fundamental scientific aspects of

nanoscale systems

• Significant results have been reported

from these projects

Application development

• 8 centers set up for nano applications

• Special grant allocated for nanotech

startups

• Nanotech incubators created to promote

entrepreneurship (e.g., NT-NCL, Pune)

• 6 projects funded under joint institution-

industry linked projects & other

programs

Human resources

• Institutes of Nano Science and

Technology to be established

• 3 international conferences conducted

• 3 advanced schools organized

• Postdoctoral fellowships initiated

Infrastructure development

• ~$250M funding earmarked for R&D

labs and academia

– 30+ universities/colleges and 15+

research institutes are engaged in

nano science research

• 11 centers of excellence for nano

science sanctioned, which will have

sophisticated infrastructure

International collaborations

• Multiple projects funded under the DST-

NSF program

• Indo-US workshops conducted

• Ongoing programs with institutions in

Germany, Italy, EU, Taiwan, Russia,

Ukraine, Japan

Platforms for interaction

• Bangalore Nano, annual event

conducted to bring together nano

experts, companies .and institutions

from India and around the world

• Vision Group consisting of researchers

from academia, industry, and research

spheres formed to develop a national

nanotechnology policy

Source: Nanomission website

4b


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Stem cell research: Flexible policy in India is supported

by coordinated government research efforts

India offers a flexible

policy environment…

…with players present

across the value chain…

…and has seen success

stories emerge

Countries with a permissive or

flexible policy on embryonic

stem cell research in brown

Denotes genome sequencing

center

Source: World Stem Cell Map created by University of Minnesota and last updated May 13, 2011. ―Stem Cell Research: Advantage India,‖ Forbes, Feb. 2010, press search.

Stem

cell

storage

R&D

Clinical

trials

Stem

cell

therapy

Lifecell, Stemade, Bioeden

National Centre for Biological

Science, National Centre for

Cell Science, Centre for

Cellular and Molecular Biology,

Christian Medical College

All India Institute of Medical

Sciences, LV Prasad Eye

Institute, Christian Medical

College, Medanta, Patki

Hospital, Reliance Life

Sciences

All India Institute of Medical

Sciences, LV Prasad Eye

Institute, Christian Medical

College, Gangaram Hospital,

Reliance Life Sciences

~22 public and ~7 private institutions

are authorized to conduct stem cell

research

4b

“The Centre for Stem Cell

Research at Christian Medical

College has succeeded in

reprogramming cells drawn from

adult mice and making them

function like stem cells found in

the human embryo”

– Times of India, Mar 2009

“In what can be stated to be a

huge feat for Indian stem cell

treatment, Netaji Subhash Chandra

Bose Cancer Research Institute

carried out a remarkable transplant

from an unrelated donor”

– Zeenews, Jul 2009


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Until recently, many hurdles existed for academia

to assume a critical role in life science innovation

Top hurdles to collaborating with academia in India

Respondents (%)

25 10075500

61

33

Reluctance to work with

government institutes39

Misdirected efforts

Risk of IP if academicians

work with competition48

Unclear regulatory stance on

technology transfer

Lack of capability 21

Lack of incentives 30

Source: BCG US and Europe Pharma companies Survey, Mar 2011 (N=33), Expert interviews

4b

“We tried collaborating with Indian academia;

however we ran into roadblocks over payment

terms.”– SVP R&D, Global Pharma

“It is difficult to establish contact with academia

in India as they are not very open to business

opportunities unlike in the US. This is probably

due to high dependence on government funds.

Indian scientists have now started

exploring/responding to such opportunities.”– SVP R&D, Global Pharma

“We have academic collaborations, but not with

Indian institutes. It is quite difficult to collaborate

with them and moreover the kind of technology

we are interested in does not exist with Indian

academia.”– CEO, Indian drug discovery company


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Increased focus on commercial impact: Bayh-Dole and tech

transfer introduced to improve migration from lab to market

“Indian Bayh-Dole Act” being created

to incentivize academia

Need:

• Clear policy on sharing IP from public funded

research

• Incentive for researchers in govt. institutes for

working on commercially attractive projects

Objectives:

• To create uniform legal framework for protection

and utilization of the IP generated out of public

funding

• To provide incentives for creating and

commercializing IP from public funded research

Features:

Institutes to constitute an IP management

committee that will apply for patents and manage

the commercialization process

Clear division of royalties with incentive for

researcher:

• Researchers will receive a minimum of 30% of

royalties from the public funded intellectual property

• 30% paid into the fund created by committee for IP

management

• Remainder retained by the institute for further

research

Status: Currently tabled in upper house of parliament

Enablers being instituted to promote tech.

transfer from academia to industry

Proposed to create ten national/regional technology

transfer cells (TTCs), with each servicing a cluster

of institutions in a region

TTCs to provide technology transfer services

including:

• Evaluating technology and identifying potential

commercial uses

• Developing and executing intellectual property

protection strategies

• Negotiating and monitoring the licensing

arrangements

Status:

Part of current five year plan program – on ground,

action awaited

Institutes

Regional

cluster

Technology

Transfer Cell

Source: PRS Legislative research, Planning commission of India, Literature research

4b


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Incentives for academia: Compensation increased by more

than 3x

1,489

1,031

407

267

0

400

800

1200

1600

Existing Revised

US$ per month US$ per month

1,489

1,031

0

400

800

1200

1600

Existing Revised

US$ per month

1,756

1,053

498

364

0

500

1000

1500

2000

Existing Revised

US$ per month

Scie

nti

st

Facu

lty

Senior Scientist Director

Associate Professor Professor

Note: Revised pay includes pay gradeSource: Indian Council of Agricultural Research; 6th pay commission

556

1,667

556

1,667

0

500

1000

1500

2000

Existing Revised

Average pay for professions with graduate

degree

1,047

480

300

178

0

200

400

600

800

1000

1200

Existing Revised

US$ per month

407

1,047

178

480

0

200

400

600

800

1000

1200

Existing Revised

US$ per month

Scientist

Assistant Professor

4b


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Talent: Repatriation and immersion programs introduced to

develop research talent pool

Note: The numbers mentioned above are actual awarded fellowships and not proposedSource: Press information bureau, Govt. of India, Wellcome-DBT website, BCG analysis

Young

biotechnologist

award

(61 awards;

~$9M)

Associate-

ship for Young

Scientist in

niche areas

(110+ awards;

~$7+M)

DBT-Wellcome

Trust

Fellowship

(46 awards)

Ramalingaswa

mi Fellowship

(40 awards;

~$32M)

Junior

Research

Fellowship

(290+ awards;

~$19+M)

Tata Innovation

Fellowship

(25 awards;

~$1.3M)

Programs to

promote

biotechnolo

gy research

Illustrative

4b

Scale of programs still small

with only ~150 scientists benefitting annually

Target group: Young scientists

below 35 years age

Program type: Financial

support for a project along with

a fellowship

Duration: 3 to 5 years

Target group: Scientists of

Indian origin working overseas

Program type: Fellowship for

taking up research positions in

India


Target group: Indian

researchers involved in

interdisciplinary innovation work

Program type: Fellowship and

research grant


Target group: Post graduates

in biotechnology

Program type: Research

fellowship


Target group: Experienced

scientists abroad interested in

doing research work in India

Program type: Funding for

research and fellows

Duration: 5 years

Target group: Young Indian

scientists

Program type: Overseas

training in niche research areas

in biotechnology

Duration: Up to 1 year


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Existing infrastructure is not optimally planned; need for greater

regional concentration to develop innovation clusters

Infrastructure: Educational institutions

and bio-parks expanded

Chandigarh

Chennai

Pune

Baroda

Lucknow

Hyderabad

Bengaluru

Delhi

Kolkata

Both bio-parks and leading academia

Only bio-parks, no leading academia

Cluster of leading academia, no bio parks

Not exhaustive

Source: Literature review, BCG analysis

• Building a critical mass of companies

and leading academic institutions in a

region is key to transforming

infrastructure into an innovation cluster

• Bio-parks should be planned around top

universities and with strong linkages to

the academic organization; currently bio-

park infrastructure is too dispersed and

without strong academic linkages

• Concentration of quality academic

institutions in a region should encourage

companies to establish R&D centers

nearby to facilitate easy access to

academic talent pool

4b


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Government life sciences funding quadrupled over last

decade, albeit from a small base

16

12

8

4

0

~ 5.6x

11th Plan

2007-2012

10th Plan

2002-2007

9th Plan

1997-2002

Funding ($B)

24

20

Funding for Science and Technology

in different plan periods1

Expenditure by government

agencies on life sciences2

Expenditure ($M)

1,000

750

500

250

0

~3.7x

2009-102005-062000-01

1. Funding refers to actual expenditures by departments during 9th and 10th Plan. For 11th Plan funding estimated based on percentage utilization of planned outlay in period 2007-2010. 2. Estimations for major life sciences funding agencies (excluding agriculture related agencies), i.e., Department of Biotechnology, Indian Council of Medical Research, Council of Scientific and Industrial Research, and Department of Science and TechnologySource: Planning commission of India, Department of Science and Technology, BCG analysis

4b


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First results: Sharp increase observed in academic output

in terms of publications

No. of publications in

Pharmacology, Toxicology, and

Pharmaceuticals


Biochemistry, Genetics, and

Molecular Biology


Immunology and Microbiology

5,000

4,000

3,000

2,000

1,000

0

2010200520001995

South

Korea

Taiwan

China

India

25,000

20,000

15,000

10,000

5,000

0

2010200520001995

South

Korea

Taiwan

China

India

1,000

0

2010200520001995

South

Korea

Taiwan

China

India

4,000

3,000

2,000

Source: SCImago. (2007). SJR — SCImago Journal & Country Rank, Retrieved March 15, 2011, from http://www.scimagojr.com

4b


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However, innovation role of academia

will take time to play out

Low revenues from

commercialization for academia… …due to limited IP generation

Share of academia expected to be higher in India

and China due to low levels of industry R&D

activities

and significant government support to academia

Royalty and license fee ($M)

0.3

1.2

0.9

0.6

0.0

2007-08

0.9

2006-07

0.9

2005-06

0.8

2004-05

0.7

2003-04

0.8

Share (%)

8

6

4

2

16

14

12

10

0

India

<2

US

~5

China

~15

1. NRDC (National Research Development Corporation) is the organization involved in technology transfer in IndiaSource: Controller General of Patents Designs and Trademarks, Ministry of Commerce and Industry, Department of Commerce, Government of India - Strategy for Increasing Exports of Pharmaceutical Products, December 12, 2008, King, C., Science Watch, May/June 2007, India S&T 2008, National Institute of Science, Technology And Development Studies (NISTADS), CSIR, Evalueserve, press search, BCG analysis

Share of academia in patents grantedEarnings from technology

commercialization for NRDC1

Share of academia and research

organizations in drug patents

higher at ~6% for 2009-10

4b


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Industry, academia, and government need to contribute

actively to accelerate the development of Indian academia

Industry

• Play the role of catalyst

for commercialization by

providing funding and

bringing parties together

Government

• Ensure the critical

building blocks are in

place, i.e., talent, funding,

infrastructure, and

supportive policies

Global academia

• Facilitate accelerated

capability and capacity

building through

collaborations

Indian academia

• Promote a culture of

commercialization by

promoting collaboration

and entrepreneurship

Indian

academia as

source of

innovation

4b

While efforts required to nurture academia are substantial, the

opportunity to access a huge talent pool is much greater

Chapter 5

Stakeholder agenda and the “Inno-vision” for India


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Proposed recommendations for Global BioPharma

• Sourcing largely confined to low end activities

• Significant potential exists in increasing depth and breadth of activities

sourced from India

Expand scale and

scope of

sourcing

Support

academic

development

Invest in partner

development

• Share in-house expertise and best practices with partner to improve

productivity of low cost resources

• Combine advantages of Indian companies and Global BioPharma to

develop new technologies for productivity enhancement

Pursue

“nichebusters”

• Provide targets to Indian Pharma companies and transfer preclinical

compounds for clinical development

• Support commercialization efforts in Indian academia by providing

funding and networking support

Develop an

India strategy

• Top management involvement critical in establishing expectations

from India/Indian partner, and providing endorsement to the strategy


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Role of India in R&D strategy will vary by company

depending on starting position and priorities of companiesV

alu

e g

en

era

ted

Va

lue

in

ve

ste

d

• Vendor-buyer relationship

with limited interaction

• Cost arbitrage the primary

driver of relationship

• Low responsibility for service

provider

Sourcing for cost

• Alignment of incentives

across relationship and

internally

• Re-engineering of operating

model to boost productivity

• More collaboration in

planning

Collaborating for innovation

• Partner brings unique

capabilities to Global

Pharma R&D network

• Responsible for particular

therapeutic area/technology/

process globally

Accessing basic research talent

Time

Companies successfully pursuing India-based/sourced innovation

will follow a natural evolution path with growth in confidence in partner capabilities

Imp

ac

t o

n R

&D

pro

du

cti

vit

y


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Proposed recommendations for other stakeholders

• Implement favorable policies that enhance innovation and drive

collaborations

• Address the issues in critical building blocks, i.e., talent,

infrastructure, funding, strengthening IP

Indian

government

Indian service

providers

Global academia

• Collaborate with Indian academia to support agenda of capability and

capacity development

• Incentive is access to niche technologies (nanotechnologies) and

emerging areas (stem cell research)

Indian Pharma

Indian academia

• Develop a differentiated value proposition to emerge as attractive

innovation partners for Global BioPharma

• Transform business model from an integrated to a network approach

to develop ―nichebusters‖ for Global BioPharma

• Support commercialization efforts in Indian academia

• Drive commercialization in institutes by encouraging collaborations

and entrepreneurship


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A concerted effort by all stakeholders can create a vibrant

innovation environment

The “Inno-vision” for India

Market

Pipeline

People

2010

~$2B1 R&D spend in India

2025

~$25B R&D spend in India

No commercialized drug with

significant IP contribution in

India

10-20 commercialized drugs with

significant IP contribution from

India

~3000 PhDsRequirement in excess of

~20,000 PhDs

1. This number is higher than the $0.9M mentioned earlier for size of R&D sourcing market as it includes spend on proprietary programs, as well as government fundingSource: BCG analysis

Appendix

Meet the authors


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Meet the authors (1/2)

Bart Janssens, lead author, is a Partner and Managing Director in BCG‘s Mumbai office and heads BCG‘s India health care

team. He has extensive experience across BioPharma, medical devices, providers, and payers in India. He has advised a

variety of health care companies around the world and in India, helping them chart out their strategy, improve their

performance, and strengthen their service delivery. Over the past few years, most of his work with clients in India has been

focused on driving exponential growth, improving innovation, and increasing access to innovative products and healthcare in

India. Contact info: [email protected], +91 22 6749 7153

Simon Goodall is a Partner and Managing Director in the Los Angeles office of The Boston Consulting Group. He heads

BCG‘s US West Coast health care team and is a member of the global health care practice leadership team. Simon‘s focus

areas are biotech, specialty Pharma, and MedTech industries, with an emphasis on helping companies improve new product

development and commercialization. Contact info: [email protected], +1 213 633 4511

Sarwar Islam is a Partner and Managing Director in BCG‘s New York office. He is a core member of BCG‘s health care and

Operations Practice Areas. He has focused on consulting clients in the BioPharma/generics industry in the US, Europe, and

Asia/Pacific on a broad range of strategy and operations issues.

Contact info: [email protected], +1 212 446 2897

Kim Wagner is a Senior Partner and Managing Director in the New York office of The Boston Consulting Group. She is a

senior member within its Health Care, Operations, and Global Advantage (RDEs) practices and leads the product development

topic for the firm. Kim works with clients to address opportunities in productivity, sourcing, cross-functional coordination,

process/ organizational design, new product development, portfolio optimization, innovation, strategy, and globalization/off-

shoring. Contact info: [email protected], +1 973 218 8330

mailto:[email protected]



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Meet the authors (2/2)

Rahul Guha is a Principal in the Mumbai office of The Boston Consulting Group. He is an active member of the firm‘s health care

practice. He has worked on projects in the BioPharmaceuticals/generics industry for clients in India and US on a broad range of

strategy and operations topics. Rahul has an MBA from IIM Bangalore.


Gaurav Lal is a Senior Associate in the Mumbai office of The Boston Consulting Group. Since joining the firm, he has worked

across different industries on strategy and operations topics. Gaurav has an MBA from IIM Calcutta.


Kinjal Morakhia is a Senior Associate in BCG‘s Mumbai office and has worked significantly in the health care practice. She has

worked on growth strategy projects for a leading BioPharma company. Her primary area of focus has been emerging markets.

Kinjal has an MBA from IIM Bangalore.


Saurabh Tayal is a Project Leader based in the New Delhi office of The Boston Consulting Group. Saurabh has consulting

experience across the areas of operational excellence, growth strategy, cost reduction, and benchmarking. Prior to joining the

firm, he has worked in the pharmaceutical industry at Dr. Reddy‘s Laboratories in the areas of corporate planning and supply

chain. He completed his B.Tech. from IIT Roorkee and has an MBA from IIM Calcutta




Karun RishiPresident

Email: [email protected]

Tel: + 1 781 586-1212

www.usaindiachamber.org


Life Sciences R&D: Changing the Innovation Equation in India · PDF fileIndian research...

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