Drug Discovery in India and China

GBI Research releases a report, “Drug Discovery in India and China - Gaining Momentum with Increasing Pressure on Cost Cutting”. It provides key data, information and analysis of the major trends and issues affecting the drug discovery market in India and China.

US and Europe pharmaceutical companies are under increasing pressure to reduce expenditure due to increasing cost of introducing New Molecular Entities (more than US$3 billion in 2008), tightening FDA regulatory issues, blockbuster drugs worth more than US$100 billion set to expire by 2014 and drying pipelines These pressures are expected to drive the companies towards low-cost countries such as India and China to perform their R&D activities, one of their major expenses.

Over the last decade, India and China have developed significant capabilities in drug discovery research along with considerable capabilities in phase I & II clinical trials. Both countries are able to provide significant cost savings in the range of 60–70% for discovery research and clinical trials. With discovery research occupying close to one-third of the R&D expenditure for the Western industry, outsourcing to low-cost countries is logical.

With improvements in the capabilities of Indian and Chinese companies, the intensity of collaborations with Western companies has increased. The deals market has been equally driven by big as well as mid-size companies. Over the past year, 41 major deals have taken place in India and China, of which 20 deals involved mid-size companies while 19 involved big companies like Merck, AstraZeneca, Johnson & Johnson and Pfizer. Two of the deals were with universities.

Many of these deals were focused on services rather than a therapeutic area. However, among those that had a therapeutic focus; oncology, metabolic disorders, infectious diseases and inflammatory diseases were the major therapies targeted.

While the drug discovery market in India and China is growing rapidly, its future growth faces two major challenges: funding problems, especially for the private companies, and significant talent shortages in biology and chemistry services. Venture capitalists, in both the countries, are largely risk-averse to invest in early stage R&D activities.