Time to give biotech a boost bl-premium-article-image

KIRAN MAZUMDARSHAW Updated - March 12, 2018 at 11:36 AM.

For India to realise its potential as a premier biotech hub, tax breaks are essential.

The Bangalore bio-cluster started developing in 1978, when Biocon was set up.

Even as our country — and the rest of the globe — fights killer diseases such as cancer, diabetes, immune disorders and heart disease, biotechnology has the weapons to win this war. New-age biologic medicines that help control and cure such diseases 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.

With Indian companies making significant investments in biomanufacturing to enter global 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.

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 medicines 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. It is encouraging that the government is coming out with a draft biomanufacturing policy with the Association of Biotechnology Led Enterprises. Additionally, the Government is working closely with Indian industry to come up with Biosimilar Guidelines that address cost and time of development, making sure that high standards of quality, safety and efficacy are delivered to patients globally. It is also looking to strengthen the regulatory framework by setting up a regulatory training school.

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 per cent of the global concentration of capacity and employment, India 8 per cent, and Japan and some other Asian countries 9.2 per cent; these areas are growing more rapidly in biomanufacturing capacity than the global average. Leading Indian biotech companies are focusing on biomanufacturing, spurred by the realisation 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 medicine approvals has risen by more than 30 per cent 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 pattern 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.

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. Hence, there is no reason why we cannot capitalise on the biomanufacturing opportunity and develop leadership in this sector, too.

DEVELOP INFRASTRUCTURE

A recent survey of 352 global biomanufacturers ranked China as the ultimate destination for outsourced biomanufacturing — with 17 per cent of the respondents identifying it as their top destination. India was the choice of 13.2 per cent of respondents. One of the primary concerns for biomanufacturers with regard 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. 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-entrepreneurs 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. 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.

ENHANCE CAPABILITIES

Biomanufacturing demands 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. While Indian companies are 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-characterisation testing to their offerings.

NURTURE SKILLS

Biomanufacturing demands a high level of skills and technical expertise. We still don't have a large-enough and growing pool of well-trained manpower to realise the industry's potential. It is important to fill this gap in skills by making sure that students are employable andindustry-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. Bangalore is home to some top-class academic and research institutions which have been critical to the city's pre-eminence in biotechnology.

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 four years for it to become operational. The government needs to provide a range of tax benefits — extending, until at least 2017, the 200 per cent weighted deduction on R&D to provide an impetus to research, extending the 100 per cent 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 author is CMD, Biocon.)

Published on February 29, 2012 15:47