Thursday, September 4, 2014

Pharma R&D to start moving abroad?

Here's an interesting article describing how Indian pharma companies are starting to move their R&D operations abroad in a quest for bigger profits. There are a couple of reasons suggested for why companies are making the move:

  • Companies are switching focus from the embattled generics arena (See here, here and here) towards products that either serve a more niche area, or are harder to manufacture. People with the required expertise for this focus shift are harder to find in India in the absence of a robust R&D ecosystem. Some comments from the article:
          "Investing in research abroad is specific to companies that want to grow in certain areas for which the best talent and regulatory expertise is available abroad," said Shakti Chakraborty, group president at Lupin. 
"For Indian companies to set up R&D abroad is expensive, but it is necessary, because otherwise their ability to grow within the country is going to be limited," said Kavita Patel, a fellow in the Engelberg Center for Healthcare Reform at the Washington-based think tank Brookings Institution. 
Dhaval Patel, head of Novartis' European drug discovery unit, had this to say about India's research infrastructure:

"I visited India five or six years ago, looking to identify places for collaboration, to try to identify those hubs where such [research] activities occur. I travelled all over and came back more disappointed than excited."