Piramal: Indian drug development is being stifled

India’s pharmaceuticals sector continues to attract foreign investment, even as the nation’s economy slows.

Yet if the industry is to prosper in future, many analysts believe it must outgrow its image as a producer of inexpensive copycat generics and begin making original drugs of its own – a step billionaire healthcare entrepreneur Ajay Piramal (pictured) says is now being undermined by ever-stronger restrictions on domestic clinical trials.

The latest restrictions came this Monday, as India’s supreme court paused 162 drug tests, and gave the government a month to provide evidence that adequate safeguards were in place before they could continue. When they do, drug companies trying to test products in India must still contend with a series of tough regulations introduced earlier this year, including compensation packages for patients affected by the trials.

Even before Monday’s shutdown, tighter rules had seen some foreign companies stop trials in India. But Piramal says the limitations are now also undermining attempts by domestic companies to develop original drugs.

The entrepreneur is not a disinterested observer: in 2010 he sold the generics unit of his Piramal Healthcare to America’s Abbott Laboratories for $3.7bn. He has since used some the funds to build up a business line developing new medicines, in areas such as oncology and metabolic disorders.

“In the last year and a half the situation for clinical trials has become very negative for Indian companies in terms of time and regulation,” he told beyondbrics earlier this week, “and so even we have had to move out most of our trials outside of the country.”

The restrictions don’t make testing impossible, but they do more it much more expensive, in turn undermining the economic model on which any Indian drugmaker might seek to compete against much larger and better funded global pharmaceuticals companies.

“We still have the advantage of our people and the overall cost of doing business [in India],” he says. “But clinical trials are one of the biggest costs of any drug discovery programme, and now we don’t have the comparative edge we should have.”

So far, Piramal’s company hasn’t come up with a new breakthrough product, although others are beginning to do so. In June, Zydus Cadilla, a mid-sized drugmaker based in the western city of Ahmedabad, revealed a new “breakthrough” diabetes drug — or “the first new chemical entity to reach the market having been discovered and developed entirely in India”, as my colleague Amy Kazmin put it in a report.

Yet other leading figures in the industry warn that further testing restrictions make a repeat of this success less likely, including Kiran Mazumdar Shaw, the founder of Bangalore-based biotech group Biocon, who said this week new limits would “lead to an exodus of innovators from India.”

Related reading:
US drug inspectors take Indian generics maker to task, beyondbrics
Indian pharmaceutical groups shed copycat image, FT
India plc goes shopping, FT
India: Nation’s stance on IP raises pharma fears, FT