The Indian pharmaceuticals industry has evolved significantly over the past decade, thus exposing domestic companies to intense competition and performance pressure. Domestic players are continually pitted against MNCs which have evolved R&D processes and systems - the pressure emanating has, in turn, yielded positive results. Indian companies are increasingly focusing on expanding their R&D capabilities. While generics still remain the primary area of focus, a gradual and consistent effort in the R&D space is bound to benefit India’s R&D outlook. There are numerous standards for R&D processes that are being followed by MNC’s globally, Indian companies are yet to emulate these practises and reach these set benchmarks. Pharma companies in India will be expected to rise to this impending challenge to face global competition.
Benchmarking the R&D efforts of Indian companies against MNCs
There is a distinct difference between the processes and systems that Indian companies and MNCs adopt. These differences can be observed across the R&D value chain.
Addressing regulatory roadblocks:
Regulatory hurdles often emerge as the primary determinants in pharma R&D. With growing stringency from global regulatory bodies, pharma companies are expected to proactively face the challenge. MNCs are known to have a more structured regulatory framework in place owing to their vast exposure and experience in the R&D space. The implementation of this framework is a mandate with little room for flexibility. Thorough documentation (plans for the execution of clinical trials and post-marketing surveillance), mapped out contingency measures, etc. are important criteria that need to be met in the R&D space. Indian companies are steadily moving towards a more structured and compliant environment. These requirements also emerge as an important aspect in the case of alliances. MNCs who wish to liaise with Indian companies consider compliance with regulatory norms an important criterion for collaboration.
Improved planning and execution on the part of pharma companies for meticulous compliance is the need of the hour. The key requirements for the industry are - education on compliance guidelines, trail audits and assistance in writing and generating adequate operating protocols.
Addressing new-product development strategy and economic justification
Globally, the rising convergence of health technology assessment (HTA) and regulatory hurdles places health economics and outcomes research at the centre of all development activity. Health economics research has two major objectives1:
- To improve public health through rational decision making
- To determine the relative values of alternative therapies
Health economics deals with the input (costs) and output (consequences or outcomes) involved in a health-related course of action (pharmaceutical R&D). By understanding these components, decision makers are able to judge the perceived value of an intervention accurately.
Companies which seem to have a well-defined health economics outcome framework in place are drug innovator companies with agreed vision, objectives and strategies. Identifying and focusing on high-level outcomes, facilitates meticulous planning to define measurable milestones. This aids the utilization of resources and overall efficiency. Merck, Pfizer and GSK have all adopted this approach to improve decision making2. Indian companies may have adopted some elements of this approach.
Leveraging partnerships and alliances
It has become a trend for MNCs to liaise with academic institutes and other pharma players to develop their R&D capabilities. Merck has entered a strategic alliance with Paraxel International for regulatory, strategy and clinical development planning capabilities in the area of biosimilars2. A few Indian players have followed suit in this regard. For instance, DRL collaborated with ClinTec International for the clinical trials and codevelopment of its anti-cancer drug3. However, the trend is yet to gather momentum in the Indian context.
The transition of a new molecule from research to the development stage is termed as the R&D interface. Smooth transitioning is paramount to the overall efficiency of the value chain. Ineffective management guidelines and frameworks can lead to project termination and attrition at crucial stages of drug development. As drug innovation progresses to increasingly complex models, a functional R&D re-organization model for smooth transition is critical. While MNCs tend to have systems in place to manage R&D interfaces effectively, the emulation of this concept in India is not complete.
Leveraging technology and analytics
The adoption of innovative approaches in R&D, including modelling, simulation and other statistical analysis tools, is integral to a progressive establishment. MNCs are increasingly investing in such tools. AstraZeneca, for example, is said to use ‘translational methods’ to better link preclinical and clinical data4. Meanwhile the New Targeted Therapies Group (Novartis) employs a ‘lean resource model’ for the development and commercialization of new drugs4. MNCs adopt such practices right from the time a molecule is conceptualized through to its development. The failure to use technology and analytics in formulation development overlooks potential risk indicators and best practices and finally leads to drug failure or a significant lag period in drug development. While Indian companies have not shown any resistance to embracing these technologies, the concept is relatively nascent in India. As investments towards R&D rise, it is likely that more Indian companies will emulate these tools within their R&D framework.
Adoption of the project management office (PMO) concept
Organizations set up project-management offices to help project managers do their jobs effectively and consistently Strategic planning, portfolio management, training, and providing project resources, sharing best practises are the various activities that fall under the purview of a PMO. Minimally, a PMO is in charge of actively managing the project-management capabilities of an organization, including methodology and tools. Most MNCs (e.g., GSK) have adopted this concept to simplify the issues that arise on a daily basis in R&D set-ups5. The concept is a relatively novel one and yet to gain appreciation among domestic players.
The R&D process can be further streamlined by establishing success probability parameters. This probability measures technical and regulatory success, and is an indication of development risks. Novartis has created an index which provides the probability of a project achieving development milestones (e.g. next phase, launch, etc.).Novartis Portfolio Management has created a database of outcomes (success or failure in a given phase of development) for numerous projects across the biotech and pharma domain6.
Access to best practices
The best way to enhance efficiency and quality in a dynamic system is to emulate best practices from within and outside an organization. Novartis and Roche share such practices across a common platform, regardless of business unit and therapeutic function. Establishing autonomous but accountable business units with integrated information flow and the sharing of best practices is an effective way to increase productivity while adopting the best practices of one business unit for another. However, immaculate coordination and structuring is a prerequisite to the success of such a mechanism. Indian companies are in the process of structuring their business units and focus areas, so the sharing best practices is yet to emerge as an area of priority.
Indian companies are on their way to achieving much more in terms of streamlining and overall efficiency. The need of the hour is to adopt a progressively proactive approach as opposed to a reactive one currently. The road ahead for Indian companies in the context of R&D processes and systems is a long-winding one, and with India being hailed as an attractive investment destination, this road is bound to have its share of challenging turns and milestones ahead.
1. “Making decisions on public health” – WHO Report
2. Merck – Company website – www.merck.com
3. Dr Reddy’s Laboratory – Company website - www.drreddys.com
4. “R&D models” – Business Insights
5. “Does a Project Management Office work in a Pharmaceutical Company?” – ICR Symposia, Feb 2012
6. “Does a Project Management Office work in a Pharmaceutical Company?” – ICR Symposia, Feb 2012