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THE STRENGTH OF the Indian pharmaceutical industry can be traced to a facilitatory role played by the government three decades ago when patent laws were amended to nurture the domestic drug sector. Few, at that time, would have foreseen the biggest names in the pharmaceutical world coming to India in search of partners for research and development.

The magnitude and complexity of pharmaceutical R&D is perhaps unmatched by any other business. Now that India is on the threshold of radically modifying patent laws to meet the World Trade Organisation's requirements, the domestic companies will have to grapple with a new reality that R&D is central to their existence. The recent drug discovery deal between Ranbaxy and GlaxoSmithKline Plc, even as they battle each other over patent violations in the US market, indicates that once Indian companies cross a threshold in R&D they will be courted by Western pharma firms driven by cost pressures. The strides made by the top pharmaceutical companies over the last decade are underpinned by increasing R&D investment. Arguably, the focus on R&D needed a prod in the form of WTO-induced changes. Their story, however, underlines the potential the industry has when provided the incentive and backed by resources.

The pharmaceutical industry comprises many thousand companies of varying skill. A handful of success stories tends to mask the weaknesses of lesser-known companies. The key to more Ranbaxy-GSK kind of deals is to provide a larger proportion of the industry opportunities to raise its standard of R&D. In this backdrop, the Centre's delay in wholeheartedly implementing its 2001 Budget promise of creating an R&D corpus for the industry is worrisome. A common R&D fund that is transparently managed can catalyse an improvement in the private sector. An industry that owes much to the government's facilitatory role can ill afford the delay in creating an environment that increases its competitiveness. Alacrity on the Government's part is necessary to ensure depth and sustainability to a decade's progress in the pharmaceutical industry. The R&D fund is not just about furthering corporate success. The spin-off could be on public health. For long, a frequent complaint has been that First World-centred pharmaceutical R&D has had no time for infections that end many lives in the developing world. Malaria may terrorise poorer countries, but a Pfizer or Merck cannot be expected to bend over backwards to find a better cure. The onus is on developing countries to solve their problems.

After the R&D fund was mooted, the industry did suggest a distinction between market-oriented research, and one where public health would be the primary aim. Simply put, the means could be devised to impose a price on disbursement for market-oriented research, and mitigate the financial burden on companies that carry out public health-oriented research. As barriers come down, and boundaries slowly disappear, response time to events will decline. The changing economic environment makes it imperative for the Government to hasten the implementation of its intent. Moreover, getting the R&D fund off the ground would be another milestone in its facilitatory role.

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