A sudden rollback of federal funding for public health research has jolted the US pharma landscape. With governors in 23 US states questioning the rollback, India sees both a warning and an opportunity to recalibrate its biotechnology ambitions. by Gopal Misra

The pharma and bio-tech industry in the US, continuously reinvigorated by the highly qualified researchers, state-of-the art laboratories, registering a large number of new patents of medicines, vaccines and new treatment protocols every year,  have recently mobilized against President Donald Trump’s decision to impose sudden cut in federal budget for the ongoing researches in the crucial pharma research. In this campaign, the joining of a number of state governors reveals that the stakes are really high.

The sudden cut in budget has snowballed into the international arena, with the growing attention of the prominent countries like China and India in this crucial field of health-care. China has already made significant progress to become a major player in the global biotechnology and pharmaceutical industry. It spends more on R and D than the European Union, and is expected to overtake the US in new patents and pharma products next year. It is estimated that in generating wealth and investments, the Chinese biotechnology companies had secured more than six billion USD in 2023 through licensing deals and getting a more and more sizable presence in the world market. China is adding more than 4100 novel drugs to its pipeline each year.

India is presently among the 13 countries engaged in this field with significant contribution, but for maintaining her position or to improve further to become a global player, she has to reinvigorate institutions like the Central Drug Research Institute of Lucknow, and many other institutions in this field and the university departments having a strong faculty presence of new scientists. These early initiatives have got her position as the “pharmacy of the world”. India’s exports earnings during the financial year 2022-23 were to the tune of 25.3 billion USD. According to the Pharmexcil data, India ranked third in drugs and medicines exports. Interestingly, her government has failed to live up to the dynamics and the enthusiasm of young men and women studying in this sensitive field. A number of bio-technologists are migrating to China for jobs and young post-graduates are serving food and supply chains like Zomato or Amazon.  

It is being felt that in the wake in the recent developments in the US, India, perhaps needs to revise her the production linked incentive scheme for pharmaceuticals with provision for disbursal of US$2 billion or Rs15,000 crore government incentives, which will run from 2020–21 to 2028–29, to reduce import dependence, benefit domestic manufacturers, boost new products. According to industry and academia sources, India has a large team of highly accomplished teams of researchers. Prof S.P. Bisht, vice-chancellor of the SSJ Almora University in Uttarakhand recently suggested that there is a need for diversification and innovation for development of complex and high-tech products. Interestingly, he had also been to the Wuhan Chinese laboratory, where Covid virus had reportedly leaked, and he is quite aware and cautious of the challenges of this hi-tech research. 

India, admittedly, is at the threshold of this hi-tech development, and could substantially contribute in the field, especially in the vitro diagnostic devices and emerging technologies, including in cell based or gene therapy. It is estimated that it is high time that she revises her present goal, aiming to achieve incremental sales of four billion USD or INR 29,400 crore and incremental exports of 2.7 billion USD or INR 19,600 crore between 2022–23 to 2027–28. It is necessary in the wake of the new opportunities; the ongoing tariff war has opened for her.

Invoking Judicial Intervention  

The attorneys general and governors in 23 states and Washington D.C. in the US, mostly under the Democratic regime, have filed a law-suit against the US Department of Health and Human Services and HHS Secretary Robert F. Kennedy Jr. questioning the department’s sudden rollback of 12 billion USD in public health funding. They consider it unlawful and harmful. The issue hit the headlines, when during the first week of April this year, the US Centres for Disease Control and Prevention (CDC) pulled back about $11.4 billion in funding allocated to state and community health departments during the Covid-19 pandemic. An additional $1 billion from the Substance Abuse and Mental Health Services Administration was terminated. The coalition of states argues that even though these eliminated funds were allocated during the Covid-19 pandemic, they were never intended only for Covid-19 response. Rather, much of the funding was allocated to support the public health system in the long term, as well as for pandemic preparedness.

“The funds were building the framework for stronger health responses going forward, including for outbreaks of measles and H5N1 bird flu that are happening now”, according to Dr. Joseph Kanter, CEO of the Association of State and Territorial Health Officials.

Indian Initiative

In 2019, the Indian government was able to raise a sum of 83 billion for this sector. Even after adjusting for the inflation it could be almost 10 times spent during the eighties. The BioE3 Policy (Biotechnology for Economy, Environment and Employment), is likely to position India in a much better position.  India has 665 FDA-approved plants in the US; 44 per cent of the global Abbreviated New Drug Applications (ANDA) and more than 1,400 manufacturing plants, which are compliant with WHO’s requirements.

The biotechnology sector, however, faces some major challenges in its quest for growth. Chief among them is a lack of funding, particularly for firms that are just starting out. The most likely sources of funds are government grants and venture capital, which is a relatively young industry in India. Government grants are difficult to secure, and due to the expensive and uncertain nature of biotech research, venture capitalists are reluctant to invest in firms that have not yet developed a commercially viable product. These issues need to be tackled to enable India to penetrate in this sector further.

India could be playing a much larger role in the coming month. She already has about 670 USFDA -approved manufacturing facilities in India, the highest for any country outside the US. India’s Covaxin, developed by the Bharat Biotech under the supervision of the Indian Council of Medical Research (ICMR) and the National Institute of Virology, helped millions of people exposed to Covid-19 immunised. Earlier, it is also credited for developing vaccines for the Zika and Chikungungya viruses. The Indian scientists at the Zydus Lifesciences have succeeded in developing the world’s first human DNA COVID-19 vaccine.

India is the largest global supplier of generic medicine. She produces more than 50 per cent of the world’s vaccines, supplies 40 per cent of the US’s demand for generic drugs. India gained its foothold on the global scene with its innovatively-engineered generic drugs and API. The country accounts for around 30 per cent (by volume) and about her estimated presence of 10 per cent in the 70–80 billion USD in the American generics market. The Indian pharmaceutical industry supplies over 50 per cent of global demand for various vaccines, 40 percent of generic demand in the US and 25 per cent of all medicine in the UK.