Monday, 5 March 2012

Taking India towards Leadership in Biomanufacturing

Even as our country – and the rest of the world – fights killer diseases such as cancer, diabetes, immune disorders and heart disease, biotechnology has the weapons to win this war. New-age biologic drugs that help control and cure diseases such as cancer, diabetes, immune disorders, and heart disease are fast emerging as a result of our progress in biotechnology. To deliver better and faster on this promise, the Indian biotechnology industry must create cost-effective global scale in biomanufacturing, ensuring access to affordable life-changing and life-saving therapies to all who need them.

With Indian companies making significant investments in biomanufacturing to enter world markets, and global pharma entities looking to India as their manufacturing base, biomanufacturing holds tremendous potential. It offers a stream of additional benefits such as high-end employment generation, multiplier effect on ancillary industries, and opportunity for large engineering and industry even as it leads to inclusive development. As biomanufacturing takes root, a cluster effect is likely to follow – as it happened in Bangalore – which must be encouraged, for biotechnology improves the quality of life even as commercial-scale manufacturing spurs economic and social development.

Global professional services firm Ernst & Young stated in a recent report that life sciences and automotive are two manufacturing segments to watch out for in India. As many biopharmaceuticals go off patent, biosimilars or simply put, generic versions of Biologic drugs are being developed – resulting in a significant opportunity for biomanufacturers. Policymakers need to take steps to nurture biomanufacturing to help India attain leadership in this area. What we need is a clear vision and strategy to draw up and implement a roadmap.

It is encouraging that the government is coming out with a draft biomanufacturing policy with the Association of Biotechnology Led Enterprises (ABLE). Additionally, the Government is working closely with Indian Industry to come up with Biosimilar Guidelines that will focus on abbreviated regulatory pathways that address cost and time of development ensuring that high standards of quality, safety and efficacy are delivered to patients and health care systems the world over. It is also looking to strengthen the regulatory framework by settingup a regulatory training school. This will give a fillip to biomanufacturing in the country.

Advantage India
India has an innate advantage in this sector. We have a significant capacity in generics, and the largest number of USFDA-compliant manufacturing facilities outside the US. According to BioPlan's recently released Top 1000 Global Biopharmaceutical Manufacturing Index, China holds 8.5% of the global concentration of capacity and employment, India 8%, and Japan and other Asian countries 9.2%; these areas are growing more rapidly in biomanufacturing capacity than the global average. Leading Indian biotech companies are focusing on biomanufacturing, spurred by the realization that they must build scale to enter the international market.

Biomanufacturing is the fastest growing industry segment. The rising number of products in development – the proportion of biologics in new drug approvals has risen by over 30% during the last decade – and the growth of the biopharmaceuticals industry are driving biomanufacturing. With biotechnology companies' pipelines having more than 5600 candidates currently in clinical trials, this trend is set to continue. Larger global companies are also outsourcing their manufacturing to Indian contract manufacturers. Globally there is a shortage of biomanufacturing capacity and India’s low-cost-high-value proposition offers an edge as the world seeks to bridge the global demand-supply gap in a cost-efficient manner.

We have seen how India has emerged as a preferred global destination for the cost-competitive production of active pharmaceutical ingredients (APIs) and generic formulations. There is no reason why we cannot captalise on the biomanufacturing opportunity and develop leadership in this sector too, given the right incentives and strategy. So what needs to be done to secure pole position?

Develop Infrastructure
A recent survey of 352 global biomanufacturers ranked China as the ultimate destination for outsourced biomanufacturing – with 17% respondents identifying it as their top destination. India was the choice of 13.2% of respondents. One of the primary concerns for biomanufacturers with regards to India was infrastructure. The success of biomanufacturing is dependent on land availability, uninterrupted power supply, supply of large volumes of potable water, and effective effluent treatment. Partnerships between the public and private sectors can help ensure infrastructural support.

Even as infrastructure develops, we need to create biomanufacturing hubs with a cluster approach. The Bangalore bio-cluster developed owing to the congregating intellectual capital, the presence of leading research institutions and availability of raw material. The city’s growth as a hub began in 1978 when Biocon was set up. By the 1990s, attracted by our success, bio-entrepreuners started flocking here to set up new units. The cluster outsources what it requires rapidly and at low costs, spurring the growth of ancillary biotech companies. Hyderabad became the next big cluster focused on Vaccines and anchored by companies like ShanthaBiotechnics, Bharat Biotech, Biological E and others. A cluster brings growth to the region– in terms of employment, investment, and a wide range of socio-economic services that spring up to support the cluster.

Biomanufacturingdemands high standards in terms of technology, human capital, and regulatory aptitude. India's weaknesses associated with biomanufacturing include problems associated with Quality management, perceived weaknesses around protection of intellectual property, inadequate financial support, and an unclear regulatory environment. In biomanufacturing, any cost advantage can be swiftly wiped out owing to these challenges. Biomanufacturing is an extremely complex undertaking. While Indian companiesare well positioned to move ahead, they need rigorous quality control and regulatory compliance to meet global standards. Biomanufacturing is done under current good manufacturing practices (cGMPs); regulations that require well-trained and highly skilled personnel. Adherence to cGMPs is non-negotiable for India to become a global biomanufacturing leader.

India also needs to be able to provide a host of capabilities such as fill–finish capabilities as well as assay and product-characterization testing to their offerings. A 2011 BioPlan Associates study showed that respondents outsourced an estimated average of 35% of their fill–finish operations.

Nurture Skills
Biomanufacturing demands a high level of skills and technical expertise. We still lack a large enough and growing pool of well-trained manpower to realize the industry’s potential. It is important to fill this gap in skills by ensuring that students are employable and industry-ready and also by setting up the required educational infrastructure.

We must also think creatively in terms of locating clusters. Biomanufacturing hubs can be nurtured near top engineering institutes like IIT Kharagpur or BITS Pilani, giving industry access to high quality talent. These are also relatively remote areas that willundoubtedly benefit from the collateral socio-economic development. Alternatively, top-class engineering/research institutes can be set up close to these clusters. Bangalore is home to some top class academic and research institutions which have been critical to the city’s pre-eminence in biotechnology.

Enable Financial Support
Biomanufacturing is a complex and expensive proposition. It costs between $350 million and $900 million (depending upon the product) to build, equip and validate a biomanufacturing facility. And once the facility is up, it can be as long as 4 years for it to become operational. The government needs to provide a range of tax benefits – extending until at least 2017 the 200% weighted deduction on R&D to provide an impetus to research, extending the 100% tax-free status for Biotech Special Economic Zones (SEZs), exempting SEZ Biotech units from MAT, and continuing tax incentives on STP exports for an additional 5 years.

The government needs to address the anomaly with respect to the Customs and Excise duty levied on raw materials and components used by domestic manufacturers for life-saving drugs. Even as local manufacturers pay these duties, MNCs are allowed to import finished products duty-free, which is detrimental to the Indian industry. The government also needs to provide benefits for large-scale monoclonal antibody plants to enable the industry to compete with the rest of the world.

Remove Bottlenecks
Biomanufacturing requires large investments and has long gestation periods. Countries like South Korea and China have taken the lead in biomanufacturing largely due to the support from the government. The Indian government must step in to remove the bottlenecks and act as a catalyst. Evolving and implementing the right fiscal, regulatory and infrastructure policies can go a long way towards helping biotechnology move from research to reality and address the challenges of today and tomorrow.

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