With a Little Help from the Gov't
Despite its support for academic institutions, India’s government can also frustrate biotech entrepreneurs since oversight for biotech development falls between several agencies. India’s life science industry group ABLE publicly criticized the government for not offering additional incentives for growing India’s biotech sector. “A key concern that we have highlighted, and which is playing out, is the fragmentation of resources across multiple government and decision-making bodies,” Bart Janssens, partner, managing director, and leader of BCG’s health care practice in India, told GEN.
Yet a look at some statistics in the report shows that over the past decade, India’s government has ramped up spending for biotech. During 2009–2010, some $700 million was spent on major life science agencies such as the Department of Biotechnology, the Indian Council of Medical Research, the Council of Scientific and Industrial Research, and the Department of Science and Technology. This is 3.7 times the level of 2000–2001. Under India’s 11th and current Five-Year Plan (2007–2012), government spending for total science and technology activity is projected to reach about $16 billion, 5.6 times the roughly $3 billion spent during the 1997–2002 plan.
“There is pressure for the government to do more; that is clear,” Janssens told GEN, admitting that “some government agencies are very active. I would argue that the Department of Biotechnology is one of the most proactive ones, with the deployment of funds being good versus what is allocated to them.”
Indian biotech companies are generally satisfied with some government programs such as the tax credit totaling 150% of R&D expenses, Janssens told GEN. “An area for improvement that the industry often refers to is to allow more private sector investments in higher education, given that talent bottlenecks exist,” he said.
Government incentives play less of a role in drawing companies to India than in the U.S. and many other nations, Goodall added: “Global pharma companies have chosen to partner with, or to source activities, or to create captive centers in India basically because the capabilities and the proven talent is there, not because there was an incentive to do that.
“From our point of view, incentives are better directed toward improving the collaboration between academia and industry, both globally and locally, than to attracting industry, which is already going there,” he added.
Companies with the greatest chance of success in India, Goodall said, aren’t those intent on duplicating the success they had developing traditional blockbuster drugs in the U.S. or Europe. Rather, they are companies focused on what the report calls “nichebusters”—a drug for a disease that strikes the developing world or a niche product that requires an innovative and potentially low-cost development pathway. For those companies, “collaborating with an Indian partner may in fact be a great way of bringing that product to market.”