By Arvind Sharma & Aahna Rajan
The National Policy on Research and Development and Innovation in the Pharma-MedTech Sector (“Policy”) aims to strengthen the domestic production of new drugs and cutting-edge medical devices to boost the pharmaceutical sector in India. The Policy also aims to reduce dependence on the import of Active Pharmaceutical Ingredients (APIs) and Key Starting Materials (KSMs). One of the main objectives of the Policy is to promote self-reliance through the integration of research and ease investments in the industry. The Scheme for Promotion of Research and Innovation in the Pharma MedTech Sector (“PRIP”) was launched with the Policy to provide an impetus to the research infrastructure in the country by linking academia with industry in identified priority areas.
The Policy uses a three-pronged approach to achieve its objectives:
Streamlining the regulatory framework
While the Central Drug Standard Control Organisation (CDSCO) is the licensing authority in India, there are several compliances that must be adhered to with respect to different agencies and other governmental bodies. The Policy proposes a mechanism to avoid overlapping compliances and have stricter timelines in order to align with Ease of Doing Business. This step will be important for matters relating to data protection and should reduce the time for processing approvals by half in the coming years. A single end to end online portal is proposed to be created to this effect. This portal would act as a singular interface between companies and various regulatory agencies, thereby making the process easier and reducing the compliance burden on various entities. This move should also ensure more transparency in the entire process. Furthermore, existing institutions will be developed with focus on in-house expertise on biologics, imaging technologies, AI based tools in the sector, etc.
Incentivizing investment in research and development
The Policy is intended to incentivize investment specifically in production of biopharmaceuticals, patented drugs, new technology in medical devices for cancer care, imaging, etc. It may be noted that due to longer periods of research and development as well as cumbersome regulatory requirements, investment in the said areas has been challenging. Therefore, the Policy aims to provide fiscal as well as non-fiscal incentives through introducing direct or indirect funding. Such funding would include financial support provided for late-stage research. Funding would be further facilitated through blended finance products and a proposed innovation fund in the pharmaceutical sector, thereby alleviating reluctance in investments relating to long-term research.
PRIP is also an attempt to promote investments and allow companies to benefit from the research and institutional infrastructure present in the country. It is divided into two components, where component A would focus on establishment of better institutional infrastructure, and component B would focus on providing financial assistance to entities involved in research and innovation. PRIP is designed to be highly beneficial as it aims to provide financial assistance to companies across various levels of technological readiness under set criteria. This will benefit entities with large turnovers as well as startups in terms of research opportunity in specific priority areas.
Creating an ecosystem to enable innovation
While creating investment opportunities and optimization of regulatory procedures are immediate steps that have been taken to boost the pharma industry, long term solutions include creating stronger institutional and academic infrastructure in the MedTech area. The Policy aims to do so by linking industry with academia. It is proposed that institutes of national importance will be set up for skill development. Further, since the MedTech sector is multidisciplinary in nature, various technical institutes will have to collaborate to train manpower, thereby increasing employment opportunities. Esteemed international institutes will also be invited to establish their presence in the country. Such steps are proposed to be taken by the Indian Council of Pharmaceuticals and MedTech Research and Development (which is proposed to be created under this Policy).
Apart from promotion of research institutions, investments made by entrepreneurs and start-ups are intended to be incentivized through Atal Incubation Centres (AICs) and Established Incubation Centres (EICs), Further, such innovations hubs will also be integrated with reputed institutions.
It must be noted that through PRIP, the government intends to set up Centres of Excellence at National Institute of Pharmaceutical Education & Research (NIPERs) in cities like Mohali, Guwahati, Raebareli, Hajipur, etc. This measure should help in ensuring that employment and training opportunities are available in tier two cities and rural areas. Further, bulk drug parks and medical device parks are proposed to be established, amongst others, in Himachal Pradesh, Uttar Pradesh, Madhya Pradesh and Tamil Nadu. This will pave the way for even development of the pharmaceutical sector across the country, along with more cost-effective medical solutions for the citizens.
The aftermath of COVID-19 also has bearing on the Policy as its implementation is an effort to ensure that the country is not only self-reliant but also prepared for national health crises like the pandemic. The new Policy will be a milestone in the development of the pharma sector as it shifts focus from the low value generic drugs produced in the country to research and innovation. This will aid in shifting from a “cost-based to a value-based and innovation-based industry.”
(The authors are Partner and Associate of Shardul Amarchand Mangaldas & Co respectively. Views expressed are personal and do not reflect the official position or policy of the FinancialExpress.com.)
