India’s $15 billion healthcare industry has taken hits on several fronts in recent years, from slow approvals for drugs in clinical trials to several run-ins with the U.S. Food and Drug Administration over the quality of its generic drugs.
Market growth fell to less than 10 percent last year after the increase in the number of drugs that the government said should be subject to price caps so that poor and middle-class people could afford them (Only 15 percent of India’s 1.2 billion people have health insurance).
Now, with Prime Minister Narendra Modi hinting at a “bitter pill” to rescue India’s economy, the pharma industry wouldn’t want to be at the receiving end of tough decisions; it would be difficult for a business that’s used to making medicine instead of taking it.
Biocon Ltd., led by entrepreneur Kiran Mazumdar-Shaw, is one company that has suffered along with other Indian pharmaceutical peers. Recently, the company had to restrict its clinical trials in India because of slower approvals, spiralling costs, stringent rules and regulatory uncertainty. Mazumdar-Shaw shared her thoughts for what India should do for its drug companies, including extending incentives for any costs incurred developing drugs overseas and raising the amount of money that foreign firms can invest in Indian companies to 100 percent.
Here are excerpts from an e-mail interview. It has been lightly edited.
What is the biggest issue for the pharmaceuticals business? What can the government do to help in its budget?
The difficulty in conducting clinical trials is the biggest deterrent for drug development. The incentives for R&D should extend to overseas development costs as well as patenting. This is vital for global competitiveness. It is also key to provide tax holidays to greenfield, export-oriented manufacturing projects that will further enhance our “pharmacy of the world” profile. We also need to lift the FDI [foreign direct investment ] norms in pharma to 100 percent.