Kamal Nath woos Western pharma companies

Tuesday, 01 February 2005, 20:30 IST
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LONDON: India's Commerce and Industry Minister Kamal Nath has urged Western pharmaceutical companies to outsource their research and development work to India, saying such a move would net higher profits. Portraying a win-win situation for all concerned, Kamal Nath told a meeting at the Royal Institute of International Affairs (RIIA) in London Monday that profitability in the 21st century will depend on the ability of pharmaceutical companies to make the technological shift necessary to maintain their competitive edge. "India provides not just the possibility but the unique and tangible opportunity for international pharma to make that desired technological shift - in process and in location." Kamal Nath, who is here on his way back from the World Economic Forum (WEF) at Davos, Switzerland, said it takes a billion dollars and 10-15 years of research to get a new drug into the market in the US - even more in Europe. He said research and development - including clinical research - could be done in India for a fraction of that cost. India, he said, presents five conditions that are ideal for pharma relocation: low cost of manufacturing; a well-developed chemical industry infrastructure; strong 'vertical integration' from bulk to formulations to packing; abundant scientific talent and technical skills; and a "unique synergy" in the fields of information technology, bio-technology and medicine. "The time is ripe for a quantum leap in India," the minister told his audience at the RIIA, a well-known policy think tank also known as Chatham House. "The question before pharma company CEOs the world over today is not 'should my company go to India?' but 'can my company afford not to go to India?'" he added. Kamal Nath admitted that while India has a huge drug industry, earnings are "not commensurate with the size" because most Indian companies are involved in producing generic copies of branded drugs. And in the pharmaceutical industry it is the intellectual property value that constitutes the largest profit margins. Nevertheless, Indian companies have been scaling up and a large number of laboratories have been set up with state-of-the-art R&D equipment. As a result, Indian companies are "poised and fully geared" to take advantage of the $50 billion worth of drugs set to go off-patent in the next five years, the minister said, adding: "We'll grab a major share."
Source: IANS