Tech tonic

Mumbai, Sept. 24: Storm clouds are hovering in the drug research domain where Indian companies have raked in the moolah from a string of successful discoveries.

Research costs are on the rise and the chances of success in discoveries are less.

The time to develop new drugs has also lengthened. A few years ago, it took around two years to launch a new drug; it now takes over six after approvals and clinical trials.

According to Paresh Vaish, director of the Boston Consulting Group, the cost of research is rising. The cost would be $2.3 billion in 2010 from $1.5 billion now, he said.

Vaish, who analyses drug trends, said a company launched only one drug from a pipeline of eight molecules between 1995 and 2000. It is one from 13 molecules now.

Like the global majors, Indian pharmaceutical companies are spending big on research, with some even investing around 10 per cent of their topline.

Dr Reddy’s Laboratories, Ranbaxy Laboratories, Sun Pharma, Lupin and many others are trying to build a pipeline of new chemical entities (NCEs). Ranbaxy’s NCE pipeline has 3-5 molecules in the late discovery stage and two in the second phase of clinical trials. Dr Reddy’s has nine molecules in various stages of development.

At the annual general meeting of the Organisation of Pharmaceutical Producers of India (OPPI), Vaish said the industry’s growth and profits have been driven by prices in the US. He said the drug prices in the US are the highest in the world, while in Canada the prices are half of that in the US.

Vaish warned that prices in the US could fall by 20 per cent as the US government would step up purchases for its medical health insurance programme.

The government incentives for research must be extended by another 10 years, OPPI president Ranjit Shahani said today at the meeting. The incentives will come to an end in March 2007.