Biotechnology in India
The biotechnology sector is one of the fatest growing sector in India and is expected to play a major role in this developing economy. Many clinical trials are already conducted in India and major companies have been involved with this market previously. With numerous R&D facilities, depth in knowledge and skills, and cost effectiveness, India has all the potential to grown in a global player in the biotechnology industry. This industry is growing at 18.5% with the total industry size at $4.3 billion. It is expected that this number will grow to $11.6 billion by 2017 driven by growing demand, intensive R&D activities and strong government initiatives. The emerging markets in India have been a key factor in the boost in biotechnology front of the nation and exceptional growth has been seen by all the sub-sectors such as bio-pharmaceuticals, agri-biotech and many others. Out of the top ten biotech companies in India, four of them are agri-biotech and six are bio-pharmaceuticals.
The Department of Biotechnology, Government of India has announced the 'Biotech Strategy 2013 paper' that aims to bring the government, the industry, research institutions and global organizations. The main objective of this initiative by the Indian government aims to achieve revenues of $100 billion from their biotech industry by 2025. This is a very ambitious target putting in perspective the current annual growth and the expected growth forecasted by other analyst. The Secretary of the department said the paper will address in increasing collaboration with R&D and bring in resources to develop a strong scientific core for the biotechnology industry. The state Karnataka is home to 52% of the biotech company with 26% of the export revenue generated here. Karnataka is the spear head of this project and will be working with the national government to further bolster their biotechnology industry. There will be more fiscal incentives to invest in biotechnology companies and Karnataka aims to construct biotech parks and set up the necessary infrastructure for further developments. The regulatory policy is also revised in this paper and makes it easier for companies to get their drugs approved. This regulatory revision will play a critical role if the combined turnover of Indian biotechnology and healthcare sectors are to meet the $100 billion expectation by 2025. Different from other industries, the biotech in heavily regulated by government bodies in the world. The regulatory body in India will have to revise their approval process and increase the approval rate without detracting from the safety measures during the process. This will be a challenging hurdle to overcome for the Indian government and biotech industry.
Foreign investments will be important factor for the growth of the India biotechnology companies. As of now there are many small biotech companies, but they are fragmented and predominantly generic or contract research organization (CRO). There is a lack of innovative emphasis in the current biotech industry and not many new drugs are coming out of India. India will be an attractive place for foreign companies to set up branches and R&D facilities. India has one of the highest number of scientists who graduate annually in the globe and has a depth of scientific knowledge. Combining this wealth of knowledge with government support and lower cost structure will the be golden egg for large global pharma and biotech companies. The Indian government included Foreign Direct Investments (FDI) in this paper which allows these investments are permitted through the automatic route for manufacturers of drugs and pharmaceuticals. Between April 2000 and December 2012, the FDI has grown $8.5 billion in the Indian biotech sector. Some of the deals made in this period are in the billion dollar range. Biocon and Mylan entered into an agreement for the development and commercialisation of a generic insulin product for $11.5 billion.
The Biotech Strategy 2013 paper is an ambitious plan for the biotechnology industry in India. Reaching a $100 billion market by 2025 will require a lot collaboration between the government and the industry. The revision of the regulatory policies will also play an important role to approve more drugs and put them on the shelves. The Indian government saw the opportunity in all the resources they had to boost the biotech industry and planned out a strategical plan to accomplish their targets. This strong initiative shown by this government shows important of strategical planning over a long-term. Even with the right resources, with out planning a how to utilize this resource properly can prove to make the project a failure. I would like to ask the class, what are some strategical approaches to find the right timing to launch a plan and when do you know whether you have the right resources to make your strategy a success?