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Friday, August 13, 1999

Funding R&D 

 
The government committee on pharma research which submitted its proposals recently, has taken a basic step towards involving the private sector in an industry where 80 per cent of R&D is confined to public sector institutions. The recommendations, if adopted, would at least set a trend opening up new opportunities in drug delivery research in the domestic industry. In fact, some of the proposals are also far-sighted; for example, the one recommending compulsory licensing within a global regulatory framework compatible with TRIPS.

However, more thought needs to be given to filling up the lacuna before the draft recommendations are adopted. Some questions that arise are: Will enough effort be made to ensure the ploughback of cess funds into the private sector? Also consider: A Rs 200 crore corpus to fight tropical diseases is far from sufficient; in the developed countries it costs $500-700 million to research a single drug. Research is a costly affair in India, too, except that manpower is cheaper.Allocating larger amounts towards R&D would definitely go a long way in incentivising research-oriented companies like Dr Reddy's Laboratories, Ranbaxy, Wockhardt, Torrent Pharmaceuticals and others, who often have no option but to fall back on collaboration. As it is, pricing in India is not conducive to funds ploughback into R&D; at the global level, it is as high as 15-20 per cent at net level. There is also a need to give, apart from the fiscal incentives announced, interim incentives for industry at each stage of development since the whole process of molecule-development could take 10-11 years. But inarguably, the key to systematic R&D funding is the venture capital fund concept, which still remains a slow starter in India twelve years after its inception.

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.


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