Biotech companies must focus on R&D

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By combining cost-efficiency with focused research and development (R&D), biotechnology firms in developing countries can create a new source of innovation for global health, say scientists Justin Chakma and colleagues.

The success of Indian company Shantha Biotechnics — which began with a US$1.2 million investment in 1993 and was last year acquired by Sanofi-Aventis of Paris for 571 million Euros — shows that biotech innovators can thrive in the developing world.

The authors say that Shantha has not only been a financial success, but has also addressed local health problems and saved millions of lives by developing and deploying a cheap hepatitis B vaccine.

Maintaining a balance between local health impact and financial return in developing countries is possible, say the authors — if companies follow four principles.

First, identify unmet medical needs where cost efficiencies can be achieved locally and combine this with strong leadership.

Second, seek funding and collaboration with non-traditional and international sources such as the US National Institutes of Health.

Third, focus on innovation and reinvest profits into R&D. But firms should not insist on home-grown manufacturing or clinical trials if that entails compromise on quality, even if it's for the sake of patriotism. 

And finally, biotech firms in developing countries must avoid outsourcing and maintain internal development capabilities to avoid compromising quality and to capitalise on opportunities to do contract research work for other companies.

Link to full article in Nature