My Thoughts and Expressions
Kiran Mazumdar Shaw

Friday, 5 February 2016

Pharma & Biotech Sector Must Get Its Due This Budget

Courtesy: The Hindu


Finance Minister Arun Jaitley has a challenging task at hand to present a Budget for FY17 that spurs India’s growth at a time when the economic scenario appears challenging, both externally and internally. The global economy is expected to slow down further in 2016 pulled down by weakness in major emerging economies like China, Brazil and Russia. These global trends as well as weak investment sentiments at home are likely to impact India's GDP for FY16 and growth prospects for FY17.

Mr Jaitley’s last two Budgets belied hopes of ‘Big Bang’ reforms. Instead, he opted a path of gradual reforms aimed at addressing both the corporate and social sectors. This time there are expectations that the Budget will provide more specifics on Prime Minister Modi’s ‘Make in India’ campaign. Given that biotechnology is one of the key sectors identified by the government as part of ‘Make in India,’ it is imperative that the upcoming Budget provides an enabling and facilitating framework for preparing the Indian biotech industry to meet its aspirational target of US$100 billion by 2025.

The recently unveiled National Biotechnology Development Strategy has provided a strategic roadmap for India’s emergence as a global biotech innovation hub. However, the tactical elements needed for achieving this distinction will have to come from the Budget document. Access to capital, quality infrastructure, high-end talent are some of the immediate needs of the sector which need to be addressed by the Finance Minister in his Budget.

If India is to build global leadership as a knowledge economy, research and innovation must be its foundation. It is therefore vital that we focus on fiscal incentives that foster research, innovation and education in enabling technologies that will propel us into the future.

In this context, it needs to be pointed out that the proposed removal of tax breaks, specifically the weighted deduction for expenditure incurred on scientific research, could blunt the India pharma and biotech industry’s ‘innovation’ edge and put it at a competitive disadvantage to its peers.

In FY15, the weighted tax deductions on R&D amounted to Rs 8,100 crore (US$1.4 billion), which is a mere 8% of the total Rs 98,400 crore (US$16.4 billion) in tax incentives availed by corporate tax payers in different sectors. However, the impact made by the pharma sector is in sharp contrast with the concessions it has availed. In FY15 alone, pharma exports stood at US$15 Billion. Similarly the pharma sector has brought in over US$13 billion in FDI in the past 15 years starting 2000. It has also provided employment to over 10 million people.

The Indian pharma industry is today recognized as the ‘Pharmacy to the World’ as it is one of the lowest-cost producers of essential medicines globally, catering to nearly 30% of the demand for generics drugs worldwide.

The discontinuation of these special tax incentives will also adversely impact Special Economic Zones (SEZs), which were set up to create new engines of growth and to make India’s exports globally competitive through quality infrastructure backed by attractive fiscal incentives and minimum regulations.

The tax breaks availed by investors in SEZs in FY15 were approximately Rs 20,000 crore (US$3 billion). However, the exports from these SEZs amounted to almost Rs 500,000 crore (US$75 Billion) in FY15 and the sector collectively employed approximately 1.5 million people.

While tax exemptions given to SEZs and R&D have delivered on their stated objectives and must be further augmented to drive investment, growth and employment, it would be prudent to examine other tax sops.

Whilst phasing out tax concessions in order to bring down corporate tax rate is critical, it is also important for the finance ministry to evaluate the socio-economic impact made by the sectors that enjoy these special incentives. If the quantum of the tax revenue foregone is not substantial and yet it has resulted in tremendous socio-economic gain it must continue.

India accounted for nearly 70% of all new offshore R&D centers established in 2015, making it the No. 1 choice for global technology-led R&D, according to consulting firm Zinnov. Furthermore, US$12.3 billion or 40% of global engineering and R&D investments in 2015 flowed into India versus US$9.7 billion into China. This is a formidable position which must be augmented and not weakened by any policy change. 

More importantly, the government will need to walk the talk on the issue of universal health coverage.  As a first step, Mr Jaitley could raise the budgetary allocation for pharma and healthcare such that public health spending in India is recalibrated to at least 2.5% of GDP from only about 1% currently.

A Budget that puts PM Modi’s ambitious socio-economic initiatives into action would go a long way in pulling the nation out of its current state of despondence by pushing the development agenda for India with increased vigour and scripting a new economic growth story. 

By Kiran Mazumdar-Shaw, CMD, Biocon

Friday, 1 January 2016

Wishing everyone a wonderful 2016 filled with good health and happiness


IP Creation Can Make India the Next Global Innovation Hub


In today’s world, technology is playing a transformational role in enabling innovation and driving change. New ideas, new business models and new technologies are leading to the birth of the “ideas economy,” where the “innovation quotient” has emerged as the key determinant of market value.

India will lose out on the opportunity to benefit from innovation-led, value-added growth if it fails to recognize the enormous value that can be created by leveraging Intellectual Property (IP). Despite the scientific and engineering talent in the country, India had filed just 1,400 international patent applications in 2014. The same year, China filed 18 times as many patents as India. Japan filed 30 times as many and Korea’s count was 9 times more. The US filed over 61,000 patent applications, 44 times more than India! No wonder then that India was recently ranked 81 out of 141 countries on the Global Innovation Index 2015, well behind middle income countries such as Brazil, China and South Africa.

We are lagging behind not because there is dearth of innovative ideas in the country, but because we have failed to create a price discovery model for intangible  assets based on Intellectual Property. There have been very few Indian companies like Biocon that have dared to pursue a risk-ridden, innovation-led business and create valuable IP in an industry where the business ethos favours low-risk ventures based on services and generic drugs.

Given India’s desire to reimagine its future as a world leader, the time has come for us to really look beyond predictable, imitative business models and me-too products. Only innovation can lead to exponential growth and non-linear job creation that India needs.

Surely, India has the potential to be the next global innovation destination. For that to happen, India needs to create a virtuous financial cycle to realize the nation’s huge entrepreneurial potential. This financial ecosystem will work only if all three components – academia, entrepreneurs and industry – work symbiotically and in tandem.

To set the wheels spinning and make the model self-perpetuating, monetization needs to happen at every stage of this cycle. Academia therefore needs to create IP through its discoveries and inventions that can be licensed to either entrepreneurs or directly to industry with royalty payments upon commercialization. Entrepreneurs need to create value-added IP that can be licensed to big industry with royalties upon commercialization. Industry needs to monetize new technologies through successful commercialization that enables payment of royalties.

What works in our favour is that India is fast emerging as a destination of choice for global technology-led R&D. According to a recent study* India accounted for nearly 70% of all new offshore R&D centers established in 2015. However, India stands to lose its attractiveness as an innovation hub in the wake of a proposed government move to withdraw the tax incentives that are currently available on R&D-related expenditure. A country that already ranks low on research and innovation can ill-afford to put itself at a competitive disadvantage vis-à-vis others by doing away with tax sops that are aimed at encouraging a culture of innovation

Furthermore, India needs to remain steadfast in its pursuit of affordable innovation to enhance access to affordable healthcare for millions of patients in India. In that context, it’s imperative that India remains TRIPS compliant and yet ensures that it is not forced into a TRIPS Plus regime that aims at ever-greening of patents which is detrimental to our economic model.

India’s diverse culture and the plethora of prevailing challenges present unlimited opportunities to innovate. The India of the future will need to be agile, innovative and committed to take advantage of these unfolding opportunities. An IP-led strategy coupled with an enabling eco-system can create compelling success stories of taking innovative ideas to the market.

*study by consulting firm Zinnov

Twitter: @kiranshaw

The Top 5 Life Sciences Developments You Should Look Out for in 2016

Courtesy: Google Images

These are exciting times for the Life Sciences sector as it builds on its understanding of the disease at the cellular and genetic level to usher in new and differentiated therapies into the market. Furthermore, biomedical advances are likely to transform global health with early diagnosis and therapeutic intervention for chronic and killer diseases like autoimmune and cancer, with a promise to enhance the quality of patients’ lives.

The Top 5 scientific developments to be closely tracked in 2016 are:

Immuno-oncology

Immuno-oncology is one of the most promising fields of science being explored by scientists to develop path breaking solutions for unmet medical needs. 2015 saw some spectacular advances in this area with a market opportunity of ~ US$40 billion by 2025*. PD-1 and PDL-1 targeting antibodies and Chimeric antigen receptor T-cells (CARTs), have demonstrated how technology can be leveraged for developing path breaking therapies in immuno-oncology. The USFDA recently approved a drug that relies on a genetically engineered version of the herpes virus to kill cancer cells and stimulate immune response against malignant tumours in skin cancer patients. Several other immune-stimulating viral therapies are also being evaluated e.g. a genetically modified polio virus  to fight  brain cancer and a reengineered common cold virus for treating a form of bladder cancer.
 *Source: Leerink Partners

3D Bioprinting & Stem Cell Therapy

Stem cell therapy is also providing new hope in not only curing a number of debilitating diseases but also building organs under laboratory conditions for patients. Scientists believe that stem cell therapy is key to  managing  cancer, heart diseases, diabetes, Parkinson's disease, etc. in the near future.

Recently, TGA, Australia gave its first go-ahead to human studies for a revolutionary stem cell therapy aimed at halting/reversing the progression of Parkinson's disease, which affects up to 10 million people worldwide.

Scientists in Australia have also achieved a medical breakthrough of getting stem cells to form different cell types found in the kidney.

More significantly, a Bangalore-based tissue engineering start-up has made India’s first artificial human liver tissue with the help of 3D printing technology, using 10 million liver cells. This is a significant milestone that showcases the tremendous potential of 3D printing technology in organ development and has the potential to save many patient lives.

Biomarkers and Companion Diagnostics

Today biomarkers are providing a wealth of biological data, which are helping predict drug failures before expensive clinical trials as well as allowing scientists to identify patient pools that would respond favourably to a particular drug. We already have cancer drugs for patients with specific genetic mutations. It has also led to the emergence of ‘companion diagnostics’ that screen patients for biomarkers that gauge the safety and efficacy of a particular treatment.   Recently, the US FDA approved the first companion diagnostic to detect a protein associated with non-small cell lung cancer while approving Merck’s Keytruda drug for the disease. The companion diagnostic will enable doctors to determine whether patients have high enough levels of the PD-L1 biomarker for Keytruda to be effective.  Now, more sophisticated companion diagnostics are being developed, to assess a patient for multiple biomarkers related to multiple drugs. 

Genomic Sequencing                                            

Genomics has created a new breed of life scientists and researchers who look at disease in a very different way. A number of initiatives like U.S.-based medical geneticist Robert Green's MedSeq project, are currently looking at ways in which the profusion of genomics data and other clinical information can be integrated with  day-to-day medical practice, in order to assist the medical fraternity in  deciding on a specific line of treatment for their patients.

Already, genomic sequencing is being combined with molecular diagnostics, imaging and data analytics to decipher the cellular structure of malignant tumours and tailoring treatment regimens.

Biosimilars

Last but not the least, the development of Biosimilars is going to provide affordable access to complex biologics in 2016. The first-ever US FDA approval for a biosimilar was granted to Filgrastim, in 2015.  Encouraging developments in the highly regulated markets, point to the evolution of abbreviated clinical pathways that will allow speedier entry of biosimilars.  With US$48 billion worth of patents on a number of blockbuster biologics slated to expire soon, global biosimilars market is poised for a rapid growth, going forward.

India is well poised to play a significant role in the biosimilars area where companies like Biocon, Dr Reddy’s, Intas, Zydus Cadila and others are engaged in developing high quality biosimilars to provide affordable access to these complex biologics.

Indian patients have had access to some of the biosimilars like Insulins, Analogs, Filgrastim etc. since early 2000s and more recently complex antibodies like Trastuzumab, Rituximab, Adalimumab etc. have also been introduced. This early experience with developing biosimilars will pave the way for Indian players to capitalize on this unfolding global opportunity.

Conclusion

We are living in extraordinary times, where technology is revolutionizing life sciences. Cancer is no longer a death sentence but a manageable chronic disease. We are witnessing the development of innovative therapies that are addressing the unmet patient needs for life-enhancing therapies. Clearly, it is time to look out for a new paradigm in global healthcare where the blind can see, the deaf can hear and the paralysed can walk.  

By Kiran Mazumdar-Shaw, CMD, Biocon

Wednesday, 4 November 2015

Bangalore Can Be India’s Smartest City

Image Courtesy: Flickr/Google
As a city recognized by the world for its IT excellence, Bangalore has a global brand appeal.  Bangalore has leveraged its technological capital to create the world's second fastest growing start-up ecosystem, attracting venture capital at the highest pace of investment in the world according to Compass, a San Francisco based Global Start-up Ecosystem Ranking Agency.

Wednesday, 19 August 2015

Strengthening the Entrepreneurial Ecosystem in the ‘Ideas Economy’

Image Courtesy: Google 

The global economy is today faced with the spectre of rising unemployment. According to the International Labor Organization, the world economy will need to generate nearly 280 million new jobs between 2015 and the end of 2019 to make up for the ground lost during the last recession and ensure new entrants to the labor market can find work.

My Mentor

Ms. Anne Warrior
“The whole art of teaching is only the art of awakening the natural curiosity of young minds for the purpose of satisfying it afterwards,”said Anatole France, the famous French poet, journalist and novelist who won the Nobel Prize in Literature in 1921.