The Hindu Business Line : GSK sees big role for Indian cos in R&D

Research & development productivity is at all time low in the West and Indian companies have great potential to contribute to research services, according to Mr Venkatraman Thyagarjan, Non-Executive Vice-Chairman of GlaxoSmithKline (GSK) India.

Speaking at the Indian School of Business (ISB) on multinational innovation in India, Mr Thyagarajan said: “Localisation has been the most important connecting thread for multinational companies in their success in India.”

The drugs and pharmaceutical industry in India has changed significantly after the country abrogated product patent regime in the 70s. That was when all the 10 top pharmaceutical companies were multinational corporations. Now, it is different with seven of India’s top 10 Indian corporations and the rest MNCs.

“For MNCs, the focus is still the US and the European market, as 45 per cent of revenue comes from the US, about 35 per cent from Europe and the rest is accounted for by other parts of the world, including India. Indian business is quite challenging as MNCs are faced with low profitability margins,” he said.

GSK pioneered the culture of contract manufacturing, which has made it a lot more competitive. Pricing pressures continue to trouble the pharma sector and all the spending on research and innovation does not always get rewarded.

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