'India could become hub of biotech outsourcing'
Friday, 27 February 2004, 20:30 IST
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HYDERABAD: Outsourcing in biotechnology offers India a billion-dollar opportunity but the country needs an effective intellectual property rights (IPR) regime to tap its potential, US experts say. Steve Lawton, vice president of the US Biotechnology Industry Organisation (BIO), said Thursday with strengths like immense talent, strong chemistry technology and research and development, India could become a hub of outsourcing in biotechnology. He however added that the lack of legislation to protect intellectual property rights was keeping American companies away. BIO represents 1,000 of 1,500 US biotech companies. Its members are involved in research and development of healthcare, agricultural, industrial and environmental biotechnology products. Michael Alder, a US venture capitalist and managing director of Redmont Venture Partners, as also Indian Americans Vipin Garg, president and CEO of Tranzyme, and Jai Nagarkatti, president of Sigma-Aldrich Scientific Research, supported Lawton's views. They along with heads of some other American biotech companies are here to participate in BioAsia 2004, a biotech summit of the Asian countries that began here Thursday. They said India could benefit by having a strong IPR regime, as this would enable biotech companies, especially pharmaceutical firms, to release their products in the Indian market and help the vast patient population. They pointed out that even Indian companies like Ranbaxy and Dr. Reddy's Laboratories were coming out with new compounds and making money in the US but were afraid to launch their products in India. They said the pharmaceutical industry, which is another name for the biotechnology industry, is estimated at $1.5 trillion and is looking at ways to reduce the cost and time cycle of drug development. "On an average, the development of each drug costs $500 million to $800 million and takes seven to 10 years. There are thousands of ideas for drug development but there is not enough money to translate these ideas into drugs. If the cost is reduced to $100 to $200 million, four more ideas can be developed into drugs in the same money now being spent on one drug," said Garg. "If 20 percent of the $500 million spent on a drug development in the US is outsourced to India, it would amount to $100 million. Every year, US companies work on 1,000 drug developments and thus the opportunity will be a billion plus and several billions in years to come," he added. "Since the country lacks an IPR regime, American companies are not willing to bring the whole process to India and are instead looking for outsourcing in bits and pieces," said Nagarkatti, whose company has decided to set up a research and development facility in the ICICI Knowledge Park here. Garg said besides chemical technology, India's other strength was clinical research. "Clinical trials of a new drug costs $150 million in the US and if done in India the costs can be reduced by 60 percent," he said. Lawton pointed out that many multinational pharmaceutical companies were doing clinical research in India for approval of their drugs in the US and the European Union. They felt that like outsourcing in IT, outsourcing in biotechnology may also have a backlash but said this would be short-term as globally the businesses are cutting down costs. "Outsourcing does not mean loss of jobs in the US. It means creation of different kinds of jobs in the US," said Lawton. He, however, felt that any anti-outsourcing law might dampen outsourcing. "Outsourcing is inevitable to cut down costs and the time to find quicker solution to newer diseases. It may be a political issue in short term but it is competitive partnership in long run," said Michael.
Source: IANS
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