Risk capital, tax sops essential for pharma industry to ramp up innovation

The significance of risk capital to scale up innovation, need for tax breaks on research and development investments as well as harmonisation of the regulatory regime, were highlighted by pharma industry leaders at BioAsia on Friday.

Making most of the forum, dedicated to the Life Sciences sector, the leaders also pointed to how the government could play a major role by helping the industry, and in the process shape India into an innovator for the world.

Speaking at a panel discussion on ‘Drug R&D: Yesterday, Today, Tomorrow’, Biocon Group executive chairperson Kiran Mazumdar Shaw called for a patent box tax regime in which tax benefits are allowed on income derived from patents. “Many countries in the world offer a ten-year 10% patent box tax regime. If that can be done, India would heavily invest in patent culture and patent-led innovation, which is really the need of the hour,” she said, adding that the academia-industry linkage should also be strengthened.

Chairman of Dr. Reddy’s Laboratories Satish Reddy said the level of investments required in discovering new chemical entities is very high. It is not something that the industry can do alone, the government also has to pitch in. From academic institution collaboration, providing incentives for industry, direct funding support in some areas, there is a host of things the government can extend support, he said.

Secretary to the Centre’s Dept. of Science and Technology S. Chandrashekhar said between Department of Biotechnology and DST, there have been multiple calls for early discovery where “we fund academic institutions in partnership with industry”.

“We are trying to build an ecosystem now with service industries like CROs, pharma companies like Dr. Reddy’s and Biocon and the Government… if we could partner, we believe that India can get into innovation very soon.” The DST is likely to launch a couple of mega schemes in the innovation area to make India self-sufficient in the generic drug sector.

Joint secretary (Policy, Medical Device, Pharma Bureau) to the Department of Pharmaceuticals listed out the various initiatives of the Centre, including encouraging public-private collaboration. The department has released a draft R&D policy that seeks to create an ecosystem that can encourage venture capital investment or CSR funding for pharma innovation.

In another panel discussion on ‘Challenges in building innovation engine in pharma and biopharma sectors’, president and head, Biologics of Aurobindo Pharma, Satakarni Makkapati said risk appetite and a vibrant funding model are essential for innovation in pharmaceutical industry.

Concurring that risk appetite is necessary, CSIR-CCMB director Vinay Nandicoori underscored the importance of building strong teams, collaboration and well-defined goals.