India’s biotech firms ‘gaining power’

[NEW DELHI] India’s health biotech firms are gaining global influence, with growing means and know-how to produce new and generic drugs and vaccines at low cost, say researchers.

The strength of these firms and their ability to address the health needs of the developing world holds major implications for improving global health and prosperity.

A study of 21 leading biotech firms in India published in Nature Biotechnology yesterday (9 April) shows they can address local needs and produce cheap generic alternatives to many drugs manufactured by Western companies.

"Most people think only of information technologies as the driver behind India’s economic emergence but a lot of innovative research is underway in biotech and other life sciences as well," says co-author Abdallah Daar.

"This study documents for the first time what is happening at the individual biotech company level."

The study, led by Peter Singer of the McLaughlin-Rotman Centre for Global Health at the University of Toronto, Canada, predicts a biotech boom in India and makes a number of recommendations for biotech development.

It says the government should take steps to prevent Indian companies becoming subsidiaries to large Western companies.

It also warns that the allure of world market profits may divert Indian research attention away from treatments for specific developing country illnesses.

India’s domestic firms increasingly need to offer salaries competitive with Western firms in order to retain talented personnel, write the researchers, which could "push companies to shift focus to higher-margin products and services for Western markets".

The impact on drugs prices is already being felt in India. The 1997 launch of a domestically-produced hepatitis B vaccine, Shanvac-B, developed by Shantha Biotechnics of Hyderabad, drove prices down from about US$15 to roughly US$0.50, say the researchers.

Shantha today supplies nearly 40 per cent of the UN Children’s Fund’s global hepatitis B vaccine supplies.

The Serum Institute of India in Pune, meanwhile, has become the country’s largest domestic vaccine supplier and exporter, its products reaching 138 countries.

Through UNICEF and the Pan American Health Organization, it also helps immunise half the world’s children against several diseases.

The researchers also found that Indian firms are expanding internationally, says co-author Sarah Frew, citing the Indian firm Biocon’s purchase of the small US-based biotechnology company Nobex for US$5 million in 2006.

"An Indian company acquiring a US company is not what most people picture when they consider the Indian biotech industry,” says Frew.

However Indian activists say that the threat of these companies being swallowed by bigger Western companies will always remain.

Mira Shiva, a health rights activist based in India, said, "These biotech companies are catering to local needs. But for how long is the question."

Link to full article in Nature Biotechnology

Reference: Nature Biotechnology 10.1038/nbt0407-403 (2007)