In the current economic climate when the pharma companies are finding it increasingly difficult to raise funds for their drug discovery ventures, industry players have urged the government to evolve public private partnership models to sustain the R&D activities of pharma companies, especially for small sized firms and start ups.

A Federation of Indian Chambers of Commerce and Industry?s (Ficci ) white paper, which will be sent to department of pharma, health ministry, Prime Minister?s office, planning commission urges the government to consider introducing an Industrial Development Bank India kind of concept to fund R&D in pharma. VK Topa, advisor to secretary general, Ficci, said, ? This idea of creating a sovereign fund has been advocated by all stakeholders. Such a long-term fund will achieve multiple objectives like creating an alternative route to PE-VC funding for pharma companies, creation of a level playing field to encourage lab-based innovation by start ups and small entities in bio-pharma and generation of intellectual property by bringing together scientific talent and capital ?.

This gains significance as the department of pharma has recently unveiled government?s plan to invest around $1 billion to $2 billion annually with the vision to make India one of the top give global pharmaceutical innovation hubs by 2020.

While lauding the government?s move Topa said the industry wants government to build dynamism into the long-term fund. ?What the industry is seeking from the Centre is to work like a development agency. Rather than adopting the grant mechanism wherein an expert committee is constituted and decides on projects that would be granted funds, the returns can be maximised from the investment if the dedicated fund could be made to work like a financial institution with timely evaluation of performances, rewards linked to performances etc?.

Ideas mooted by industry include a tripartite arrangement between an industrial partner, essentially a drug manufacturer to provide low cost manufacturing, research institutes which could provide expertise and knowledge and government agencies which along with providing easy access to funding sources for such partnerships could facilitate the tie ups between industry and research institutes.

Such pooling of resources, financial and intellectual can move compounds quickly through the R&D pipeline. Such PPP models are also expected to reduce marketing and distribution expenses of a drug.

The cost cutting in terms of marketing and distribution can be attained by aggregation of demands and generating volume sales, according to experts. Distribution costs comprise of approximately 30 to 40 % of the price of the drug and have remained largely unchanged over the last 10 years. Such models are already being tried out by Bill and Melinda Gates Foundation, the Clinton Foundation, in DNDi projects of Kalazar among others. ?While larger Indian pharma companies are still relatively better placed to raise funds for R&D, internally or externally, the industry and the government have to think about creating a level playing field for smaller pharma companies and start-ups,? Ranjit Shahani, managing director, Novartis India.

?Today the research in public institutions should have the industry involvement right from the beginning. This shall ease the development as well as commercialization of such research,? said Chirag Mehta, head, Strategic Planning & Development, Intas Biopharmaceuticals Limited adding that government needs to play the role of a facilitator, between public institutions and the industry.

Referring to the initiative by the government, Nilesh Gupta, group president, Lupin said it will also enable greater interactivity between the government and the industry and help in better understanding the needs of the sector.

?The industry has expanded and seen the infusion of various models, academic, government and partnership to enable such associations to flourish. In this case also, such models will play a role in facilitating better interactivity. Gupta said.

He added, ?A PPP model will benefit most related pharmaceutical sectors like new chemical entities, advanced drug delivery system, pharma and process research, biosimilars, and biotechnology. All of these are relatively new and upcoming areas and need exhaustive talent and investment, both from the mother company and from the government.?

Currently although India is the fourth largest pharma industry globally, it accounts for less than 1% of $130 billion spent worldwide in drug discovery.