Indian pharma firms look to ramp up investments in R&D, innovation

The Covid-19 pandemic has not led a huge demand for innovations in the pharma sector, but has also given a fillip to research and development (R&D), which have become the most important segment needed to meet the rising demand of more vaccines, along with drug and therapeutics to fight emerging diseases. With this in mind, domestic pharma firms are now looking at ramping up their investments in innovatory products and R&D exercise.

The pharmaceutical leaders believe that more investments in the innovations and R&D will spur the growth of domestic industry. According to a recet report by India Brand Equity Foundation (IBEF), India's domestic pharmaceutical market is estimated at $42 billion in 2021, it is likely to reach $ 65 billion by 2024 and may further expand to reach ~$120-130 billion by 2030.  

"For short and medium terms, we will continue to invest on growing businesses across geographies like India along with the regulated markets of US and Japan but at the same time, we will also be making investments to bring new innovatory products to the markets. Currently it is between 7-9 per cent, but we're expecting to take it from 9-12 per cent in the next 5 years. And we're expecting to invest between $600-650 million on research," said Dilip Shanghvi, managing director, Sun Pharma. Shanghvi further said that his company has seen over a 50 per cent growth in its innovatory business in 3 quarters of this years. "And we expect the growth to continue," he added.

According to IBEF, India ranks 3rd worldwide for pharmaceutical production by volume and 14th by value. The country has an established domestic pharmaceutical industry, with a strong network of 3,000 drug companies and around 10,500 manufacturing units. Indian Pharma companies are consistently investing in the R&D section as well after the Coronavirus crisis.

"Our research spends are already at 10-12 per cent. In that budget, we use 2/3rds to support our current businesses and 1/3rd to build the future in biologics or novel chemical entities," said GV Prasad, co-Chairman and managing director, Dr. Reddy's Laboratories.

The industry leaders believe that the pandemic stunted the industry growth because of the fact that there were lesser number of people visiting hospitals. Now that the world is looking for non-China based products, Indian companies have a good opportunity to have their presence felt in the world market.

"We will be close to 10 per cent research spends at the end of 5 years. We are working on our R&D, innovation, towards improving the quality of the manpower via developing hybrid curriculums with institutes, etc.," said Pankaj Patel, chairman and MD, Zydus Cadila, adding that the government has to streamline its regulatory system - in terms of applications, timeframes, product approvals, etc.

Considering that India was very much dependent on China, and India is looked upon like a second source but a very reliable one, industry leaders believe that to that extent, the pandemic has helped build credibility of Indian Pharma.

"Especially if we can go for the complex ones such as generics, more technology, that is where we can bring value. We are increasing our investments on to more complex technologies. We've done an acquisition in Peptides last year and we've done investments in biologics. So, across the board, we are now increasing our focus on technologies and people," argued Ajay Piramal, chairman, Piramal Group.

The leaders of the pharmaceutical companies were taking part in the 'CEOs Conclave' as part of 'BioAsia 2022', the Telangana government's flagship annual life sciences convention that concluded on Friday.