| The union minister of health and family welfare of India recently invited Japanese companies to collaborate with Indian companies on research and innovation in emerging therapies, like precision medicine, cell and gene therapy, biological products, and on the utilization of digital tools and technologies. This was reported on May 16, 2023.
Underscoring this objective, the minister articulated, “such collaboration on research and innovation would help enhance the domestic availability and affordability of these innovative therapeutic options.” The area of research and drug innovation in emerging therapies and on the utilization of digital tools and technologies has emerged as one of the top focus areas of the country in the new normal. Currently, the Indian pharmaceutical industry is primarily focused on manufacturing generic medicines, exporting bulk drugs, and supplying active pharmaceutical ingredients. Thus, this goal can be quickly achieved through global collaborations – at a time when India plays a pivotal role in improving health outcomes worldwide by serving as a dependable supplier of affordable and high-quality generic drugs. The country is currently providing approximately 60 per cent of the global vaccine supply, and 20-22 per cent of generic exports. Importantly, ‘In the battle against the Covid-19 pandemic, India has supplied essential drugs to around 185 countries,” he underscored. Interestingly, after the Covid-19 pandemic, there has been a significant shift in the approach of both Indian and multinational drug companies towards business collaboration. This article will focus on this area with recent Indian examples, culled from available reports. However, before delving into this space, let me also point out that drug MNCs operating in India are also changing focus on their India operations, as reported in recent times. Drug MNCs operating in India are also changing business focus: This was brought to the fore by several recent reports. For example, in February 2022, The Economic Times reported:
However, their key goal remains - delivering new patient-perceived value – not just incremental, but in quantum measure for business growth. The need for increased collaboration and shared resources: Against the above backdrop, it appears to me that the pandemic has highlighted the need for accelerated cooperation and sharing resources to address global healthcare challenges, effectively. As a result of which, both Indian and MNC drug companies are recognizing the benefits of working together, and are actively seeking collaboration opportunities in the following areas. |
- Access to Emerging Markets: Indian pharma companies have a strong presence in emerging markets due to their cost-effective generic drug manufacturing capabilities. Multinational companies recognize the potential of these markets and are looking to collaborate with Indian firms to gain access to these regions. By partnering with Indian companies, MNCs can tap into local expertise, distribution networks, and regulatory knowledge.
- Example: In 2022, Cadila Healthcare entered into a collaboration with Novartis to develop and commercialize multiple oral solids and injectable generics for global markets, including emerging markets.
- Research and Development: Collaboration in research and development (R&D) activities has become crucial for drug companies. MNCs bring advanced research capabilities, cutting-edge technologies, and substantial financial resources, while Indian companies offer a skilled workforce and a cost-effective environment for R&D. By joining forces, they can pool their strengths and accelerate the discovery and development of new drugs and therapies.
- Example: In 2021, Bharat Biotech collaborated with the Washington University School of Medicine in St. Louis and the International AIDS Vaccine Initiative (IAVI) to develop a novel vaccine candidate for HIV. This collaboration aims to combine the strengths of all three organizations to advance HIV vaccine research.
- Manufacturing and Supply Chain: The pandemic exposed vulnerabilities in global supply chains, particularly in the pharmaceutical sector. Collaborations between Indian and MNC drug companies can help diversify manufacturing locations and strengthen supply chain resilience. Indian companies’ expertise in large-scale generic drug production can complement the specialized manufacturing capabilities of multinational firms.
- Example: In 2021, Hetero entered into a partnership with the Russian Direct Investment Fund (RDIF) to manufacture the Sputnik V Covid-19 vaccine in India. This collaboration aimed to increase the production capacity of the vaccine to meet global demand.
- Regulatory Compliance: Regulatory compliance is a critical aspect of the pharmaceutical industry. Indian companies have been working closely with regulatory authorities to meet global standards and gain approvals for their products. Collaborating with Indian companies enables MNCs to leverage their understanding of regulatory processes, navigate local regulations efficiently, and ensure compliance with diverse international requirements.
- Example, in 2022, Biocon Biologics partnered with Adagio Therapeutics, a US-based biotechnology company, to develop and commercialize an antibody treatment for COVID-19. This collaboration involves regulatory support from both companies to navigate global regulatory processes.
- Market Expansion: Collaborations provide an opportunity for both Indian and multinational companies to expand their market presence. Indian companies can benefit from the MNCs’ established marketing networks, while MNCs can leverage the Indian companies’ extensive distribution channels and market knowledge. Joint ventures and partnerships facilitate market entry, improve market penetration, and help companies capture a larger share of the global pharmaceutical market.
- Example: In 2022, Torrent Pharmaceuticals collaborated with Swedish multinational company Handicare Group AB to distribute and market Handicare’s range of mobility solutions in India. This collaboration enables Torrent Pharmaceuticals to diversify its product portfolio and expand into the healthcare mobility market.
- Technology and Innovation Sharing: Collaborations foster knowledge exchange between Indian and multinational drug companies. MNCs can share their technological advancements and research findings, while Indian companies can contribute their insights and expertise in managing large-scale production. Such knowledge-sharing initiatives can drive innovation, improve manufacturing processes, and enhance overall operational efficiency.
- Example: In 2022, Glenmark Pharmaceuticals entered into a collaboration with the Canadian multinational company SaNOtize Research and Development Corp. to develop a nitric oxide nasal spray for the treatment of COVID-19. This collaboration combines Glenmark’s expertise in drug development with SaNOtize’s innovative nitric oxide platform.
- Intellectual Property and Licensing: Collaboration often involves the exchange of intellectual property (IP) rights and licensing agreements. Indian companies possess a vast pool of generic drug formulations and manufacturing capabilities. MNCs can license their patented drugs or technology to Indian partners for production and distribution in specific markets. These licensing arrangements benefit both parties by expanding the product portfolio and maximizing revenue potential.
- Example: In 2021, Glenmark Pharmaceuticals signed a licensing agreement with Canadian biopharmaceutical company Xenon Pharmaceuticals to develop and commercialize a potential treatment for epilepsy. This collaboration involves the licensing of Xenon Pharmaceuticals’ proprietary technology for the development of a novel therapeutic product.
Conclusion:
Overall, as the recent trends indicate, the post-pandemic era has accelerated initiatives of strategic collaboration between Indian and multinational drug companies. By leveraging each other’s strengths and with shared value and resources, these collaborations aim to drive innovation, address global healthcare challenges, and deliver affordable and accessible healthcare solutions to patients worldwide. And thereby, will help deliver a unique patient experience.
Additionally, the examples, as available from published sources, highlight an increasing number of such recent collaborations, besides operational re-focusing by several MNC drug majors in India.
These strategic steps clearly emphasize their joint efforts to drive innovation, expand their market presence, and address critical healthcare needs. From this angle, I believe, for sustainable business excellence and for staying relevant to customers in the new digital world, one of the top focus areas for Indian pharma players deserves to be strategic collaboration initiatives.
By: Tapan J. Ray
Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.