Recommendations for development

On the basis of the study, the authors made six recommendations to
encourage continued growth of the sector:

• Harmonize pharmaceutical regulatory system into one regulatory agency and ensure adequate training for regulatory personnel
• Increase training programmes in advance biotech through a single agency for science mentoring and guidance
• Ensure translation of initiatives in the draft Biotech Strategy into policies that increase effective public-private collaboration and encourage academic scientists to pursue entrepreneurial ventures to commercial research
• Create a favourable and enabling financial environment for enterprise creation and private sector development, including early stage research and product development
• Identify national priorities for public health and use a targeted funding approach to ensure development of products and services that address local health needs
• Improve public health infrastructure and/or give incentives to private firms to develop innovative distribution strategies

The findings of this survey will be of interest to biotech firms across the globe seeking partnerships with Indian firms, venture capitalists seeking investment opportunities, foundations interested in global health solutions and developing world governments seeking ideas about successful innovation strategies.

SPECIAL SUPPLEMENT

BOSTONMay 6-9, 2007
BIOPHARMA SECTOR IN THE COUNTRY

New Tax Exemptions for Clinical Research Organisations

N.S. Samant, DBT (nssamant.dbt@nic.in) and Prachi Saroop, DBT (psaroop@dbt.nic.in)

The Government of India has exempted Clinical Research Organisations (CRO's) in India from the provisions of service tax laws on export of services. This includes new drugs such as vaccines and herbal remedies.
       
World over, CRO's are gaining greater importance in field clinical trials because of their global access to investigating sites, specialized local expertise and competitive pricing strategies. The global turnover of CROs is estimated at US $15.8 billion.

The Indian Clinical Research Industry accounts for just over US $100 million and is projected to reach a size of around US $ 250-300 million by the year 2010. India has considerable strengths in terms of well-trained English speaking doctors, necessary hospital infrastructure, large disease burden in the population and a diverse human genetic pool. This has resulted in sizeable inflow of foreign funds as well as savings in the outflow of foreign exchange spent on clinical trials by indigenous companies.

Global multinationals have primarily been outsourcing research activities to Indian CROs so as to remain cost competitive. Indian CROs, even while striving to enhance their share in the global clinical trial industry, have to face ever-increasing competition from Latin American, Russian, Chinese and East European CROs. If the price base of the clinical trial industry of USA is taken as 100, India and China run neck-to-neck with a price base of around 66, Latin American countries following closely at 75 and East European countries at 80. Thus, China and Latin American countries are extremely close to India in terms of cost for clinical trials.
              
Service Tax on CRO's in India till recently was 12.24% and its recovery from clients was seriously eroding their cost advantage and overall competitiveness. Further, the amount spent by indigenous companies on clinical trials on their own products, which are usually outsourced to CROs (fully or partially) was getting reduced as it made plough back of the same money into in-house R&D facilities more attractive

These exemptions will help in making India a most favored destination for clinical trails.