ET Bureau Aug 15, 2019, 08.55 AM IST
AHMEDABAD | MUMBAI: The Indian Pharmaceutical Alliance, a group of top research-based pharmaceutical companies, has urged policy think tank Niti Aayog and the Department of Pharmaceuticals to set up a large fund to boost technological innovation in pharma and healthcare startups. “We have approached the government to set up dedicated funds to boost innovation and startups in the pharma space in India,” said Sudarshan Jain, secretary-general, IPA.
Last month, the IPA submitted its Vision 2030 document that highlights opportunities and challenges in the Indian pharma sector. The document seeks to promote innovation backed by risk capital to further boost pharma and health technology innovation in India. “IPA is advocating and advising the government to set up a startup VC fund to boost innovation in pharma,” said Pankaj Patel, CMD of Cadila Healthcare, one of the top five pharma companies in India in terms of revenue.
Patel, who is also former IPA president, said the sector has to innovate to grow faster.
IPA has also asked the government to boost its investment share in private sector R&D to 35% from 25%. This could be done by allocating more funds to R&D projects in life sciences and startups, it said.
Co-funding research projects and startups is common in developing countries, including China which has allocated $12 billion for drug development in 2010-15, it said. “Indeed, this is a great step. Like BIRAC (Biotechnology Industry Research Assistance Council) funds biotech innovation, it’s high time pharma and the med-tech sector, which are also heavily dependent on R&D, get risk funding support to position India as an innovation-based economy,” said Vishal Gandhi, founder, BIORx Venture Advisors.
India already has a Biotechnology Ignition Grant Scheme (BIG) that provides assistance of up to $5 million to biotech startups to establish and validate proofs-of-concept and to enable the creation of spin-offs. “The pharmaceutical industry expects similar and larger funds to be created across all innovations in the pharma space,” IPA said.
Past efforts to set up a funding institution to fuel pharmaceutical innovation have not taken off. Except for BIRAC and funding assistance from the Technology Development Board, which grants financial assistance to biotechnology-based startups, these attempts have drawn little interest from the government. “At least from the optics, innovation is getting importance from the government but if that will go to the level of making funding available is doubtful,” a veteran venture capitalist told ET,requesting not to be identified by name.
Innovation programmes, in addition to funding, should attract Indian scientists who have worked in international research labs, he said. Ten years ago, China initiated the Thousand Talents Program that had roped in Chinese scientists from external research institutes, mostly from the US and that has spurred its research effort in the life sciences segment, he said.