Innovation is not a function of the funds one has. It is dependent on the passionate enterprise as shown by Dhirubhai Ambani or Steve Jobs. Funds are required later for the commercialisation of the product.

While Indian pharmaceutical companies have done well in the past to create a dynamic generic drugs industry, the next trajectory is a cause for worry. The tragedy the industry faced was that while Ranbaxy’s Dr Parvinder Singh passed away too young, Dr Reddy’s anti-diabetes molecule Balaglitazone met with an unfortunate fate, affecting the passion of Dr Anji Reddy. Cipla doyen, Dr YK Hamied, focused his capabilities and character entirely to bring out less expensive medicines for the world.

India could do well to start an India Fund on the lines of Singapore’s state-owned Temasek or Malaysia’s Khazanah to invest across sectors. Innovations in labs can be supported financially to take the product to the market. Indian drug companies have been “corrupted” in a sense because it received good returns on very little risk with the generics model. Hence, there is little risk appetite. But with competition on the margins of generic drugs in the US, companies are being forced to look at speciality products, difficult to make products, or “super generics” .

Muralidharan Nair is Partner and Leader (Health) at EY India

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