The mantra is……………..Innovation!

I believe there would be a general agreement on the fact that companies in today’s world need to innovate to survive. However, the conundrum is how much of the company’s revenue (small/medium enterprises) or initial funds (as for start-ups) be focused on the research activity? 

Let us take examples of two types of business models (we would only consider biotech/life science industry). First is the ‘service’ model where the companies provide technological services for fee. These might range from providing protein purification services to next generation sequencing. The companies rely on their expertise and promote their cause by trying to give the best services. Since many of the companies utilize an already known technology they focus on giving their clients the best technological support and in due course would expect good ‘word of mouth’ publicity for the company to promote its services. The better companies which survive for the longest duration however are also focused on improving the ‘in –use’ technologies to sharpen their service portfolio. This is crucial as the subtle improvements can bring in new clients and can also cater better to the existing client base. One general question can be since these companies utilize instruments or reagents from established players (Illumina, Agilent etc.) why should the service provider invest money to innovate? Surely the instrument manufacturers are doing their bit and the service providers can acquire the technology from them! So why not completely focus on marketing and spend little on ‘in-house’ research? Well, research does not always mean big ticket breakthroughs! Even subtle changes for example, in the protocol of a particular assay can bring in great benefits both in terms of economic advantage as well as technological advancement. Second is that newer methods can provide a valuable feedback to the instrument manufacturers and therefore the possibility of partnership increases. This gives a huge fillip to the ‘brand value’ of the service provider. Hence one cannot completely shut innovation even in service based business models. 

                                   Image courtesy - The creative Scientist

Let us now look at the ‘product’ based business model (again in the realms of life science industry). I guess there is no denying the fact that for product based life science organizations ranging from companies delivering ‘bioinformatics suite’ to companies selling enzymes, innovation has to take the primary seat. Newer and better products are the keys to survival!

But having known these facts how many SMEs (Small medium enterprises) really focus on innovation? Many companies think that money spent on R&D is not worth it especially in the life science sector as there is a long incubation period and higher failure rates. But then investing in research is like buying insurance. Not only the companies need to invest but invest in the right idea and people to continue surviving in this fast paced era!

India’s Supreme court ruling on Novartis’s Gleevec – A Perspective

Recently, the Apex court of India rejected the patent application of Novartis’s anti-cancer drug Gleevec (http://www.thehindu.com/news/national/landmark-verdict-gives-big-boost-to-cancer-patients/article4569056.ece?homepage=true)

As per Indian law "ever-greening" of the drugs is not encouraged whereas the big pharma companies keep on doing minor modifications to gain longer patent life in the US and other Western countries. This judgment therefore is in the right direction as it clearly defines what "innovation" is in the Indian drug market context and will give hope to millions of poor patients not only in India but across the world. 

But, I also have a point against the Indian pharma industry which is mostly focused on 'generics'. Indian pharma industry is not too keen on developing new drugs (NCEs) and is looking for major profits once the old drugs come off patent. This is not a healthy trend. Also, the amount being charged by these companies on these drugs can be slashed even more as they have not spent even a penny for the development of these drugs and so there is no point in even charging what they are right now for these drugs!!!

Of course, the above point holds true for NCEs but may not hold true for Biologics!. Biosimilars are a different ball game all together and it would be interesting to see what the future holds for the Indian pharma industry which is betting heavily on generics and biosimilars!

Finally, this verdict is definitely good for the patients and may be also good for the Indian pharma industry in the short run but I feel Indian pharma and Biotech industry need to innovate more and come out of the “profit making with minimal investment mindset"!