India and China attracting R&D spend from the West
Drug discovery in India and China is gathering momentum as the regions develop major service capabilities and draw an increasing
amount of western pharmaceutical R&D to their shores.
According to a report from GBI Research, Drug Discovery in India and China — Gaining Momentum with Increasing Pressure on Cost Cutting, China and India offer cost savings of 60–70% compared with western territories when it comes to drug discovery. This acts
as a major lure for pharma companies in light of the severe financial constraints in Europe and the US, and the fact that
discovery research usually accounts for approximately one-third of R&D expenditure.
During the last decade, China and India have developed significant capabilities in drug discovery research, as well as considerable
capabilities in Phase I and Phase II clinical trials. The report also adds that many domestic companies in these countries
have defined their therapeutic research focus. The top three therapeutic areas are inflammatory diseases, metabolic disorders
and cancer; however, there is some variation between the two countries, with Chinese companies focusing on oncology and Indian
companies concentrating more on metabolic disorders — primarily diabetes, obesity and dyslipidaemia.
The developments and advances made by China and India's pharma sectors have led to a gradual increase in the number of deals
being made over the past few years. For instance, 13 major research deals were made in 2009, compared with 11 in 2008, 9 in
2007 and only 6 in 2006. A number of the deals in China and India have involved Big Pharma companies, including AstraZeneca,
Johnson & Johnson, Pfizer and Merck, but there has also been an increase in the number of mid-sized companies making deals,
with 10 deals made in 2009, compared with 2 in 2008. According to the report, the growing number of deals suggests "the rising
interest of such companies to exploit the cost and quality capabilities" offered by emerging markets. Interestingly, however,
although China and India have been building their capabilities in specific therapeutic areas, the majority of deals focused
on services.
The challenges
Despite Western pharma's increasing interest in China and India, as well as the countries' growing expertise, there are still
challenges that must be overcome. One of the principal issues is the lack of a sufficient talent pool, with many workers in
both countries lacking specialised skills and experience — particularly in biology and chemistry services. Another problem,
which varies slightly between China and India, relates to funding. Although China has considerable government support, a large
part of the money goes to government funded research institutions and universities. Meanwhile in India, the government has
adopted a public–private partnership model, which it believes will encourage pharmaceutical innovation. However, the main
beneficiaries will be small pharma companies and institutes affiliated with India's Council of scientific and Industrial Research.
Additionally, there can be problems with venture capitalists in both countries, which tend to be particularly risk-averse
when it comes to investing in early stage R&D activities.
In spite of these challenges, India and China will continue to hold appeal and, at least for the foreseeable future, will
be vying for an increasing share of Western pharma's R&D budgets.
http://www.gbiresearch.com/
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http://www.pharmtech.com/pfizerjobcuts
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http://www.pharmtech.com/underestimated
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http://www.pharmtech.com/qualityconcerns
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Read more at:
http://www.pharmtech.com/h1n1overrated
