India has recognised the need for strong innovation policies

Recently, World Bank has announced its new project ‘Innovate in India for Inclusiveness’, to help India develop an innovative biopharmaceutical and medical devices industry and promote industry-academia dialogues. Jorge A Coarasa, Senior Economist (Health), World Bank divulges more details about the project

When is the World Bank initiating ‘Innovate in India for Inclusiveness’ Project?

From July, Biotechnology Industry Research Assistance Council (BIRAC) is expected to call for proposals from public-private-academia consortia for grants towards different activities the project is supporting.

Elaborate three different components of the project and how are you going to execute it?

The first component of the project will support activities aimed at strengthening the pilot-to-market innovation ecosystem. The interventions under this component will be targeted at addressing critical gaps in infrastructure, human capital, and technology transfer that have been identified as weak areas in the pilot-to-market innovation ecosystem for biopharma and medical devices.

The project will not address the overall regulatory and institutional framework for biopharma and medical devices in India, which has already undergone significant reforms in the last three years that improved its robustness, but will have targeted interventions within that framework to improve areas where gaps have been identified, which is in the areas of clinical trials and technology transfer.

It will provide grant funding to support the creation of centres of excellence for validation, early stage bio-manufacturing, clinical development, training, and technology transfer. Funding will be used to procure specialised equipment, services, and technologies required for the different stages of the pilot-to-market process.

The project will provide grant funding to a consortia of private, public, and academic institutions, led by cutting-edge institutions in their respective field, to accelerate the development of low-cost, select vaccines, biopharma, diagnostics, and medical devices that address public health priorities in India. By extending financing to a consortium, the project hopes to foster a more collaborative research and development (R&D) environment which leverages the expertise of local and international players from both the public and private sectors. Additionally, having a consortium presents an opportunity to link micro, small, and medium enterprises (MSMEs) in the field with larger companies.

Finally, the products directly supported by the project will be those that address public health priorities, have market potential, and are already in the critical validation to early bio-manufacturing stages of product development. In addition to reflecting the lower cost of development in lower market prices, the recipients of grants under this component will commit to delivering agreed quantities at agreed prices to the public health sector in India. Finally, any technologies developed in the process of product development will be treated as non-proprietary and will be accessible to other users.

How will this project encourage industry-academia iinteraction and help them in building innovation research capacities for developing affordable healthcare products?

Industry associations, academic institutions, and public sector undertakings have been convened by BIRAC to identify and prioritise both the gaps and the products targeted by the project. Grants provided by the project will be leveraged to bring together top Indian institutions with cutting-edge international players including private firms, individual experts, and contract research organisations as well as universities and other research centres. These international partners will be engaged through knowledge transfer agreements, technology licensing and acquisition, and other innovative mechanisms tailored to each activity. The grant-based design of the project leverages market demand by allocating performance-based funds through open, competitive calls for proposal with transparent eligibility and selection criteria. Sustainability has been a key criterion in the design as the project aims to build an ecosystem for the future.

How are BIRAC and World Bank working towards creating a progressive eco-system in biopharma and medical devices sector?

India has recognised the need for strong innovation policies, particularly in support of the biopharma sector. India’s strategy, ‘Decade of Innovations 2010–20’, aims at strengthening innovation capacities by increasing gross expenditure on R&D to two per cent of gross domestic product (GDP) by 2020. The Make In India initiative, an ambitious countrywide programme launched in September 2014 to encourage manufacturing, identifies the pharma, biotechnology, and medical device industries as priority sectors and aims at addressing a number of policy challenges and improving the business environment to foster India’s competitiveness.

BIRAC has supported 539 companies (mainly start-ups and MSMEs) that are implementing 360 projects, with funding support of over $100 million and commitments of over $160 million from the private sector. These projects have delivered 26 affordable products and 19 new technologies in addition to creating 53 new intellectual properties (IPs).

This project will further enhance BIRAC’s work in transforming the biopharma and medical devices industries in India. The World Bank will leverage its experience in financing and supporting the implementation of innovation, competitiveness, and public health projects to help the GoI unlock India’s potential for increased innovation. Drawing from global best practices adapted to the strategic and institutional context of India, the design of the project is based on a holistic approach to product-driven innovation in the biopharma and medical device industries. The project will help filling up financing, infrastructure/technology, and human capital gaps where there is limited public or private resources. These efforts are expected to provide strong demonstration effects and to crowd-in additional private sector financing and participation in the sector going forward.

When the industry projects that Indiais capable of tackling a host of diseases that plague the world, why is investment in research activity so low?

Access to private capital (venture capital [VC], private equity, and so on) is extremely limited at this stage due to the perception of high risk. While a few large companies have the means to fund product development and scale up, these investments can be prohibitively costly for smaller firms, and network and market financing failures can prevent their acquisition. Globally, substantial government grants are available for scale-up funding, especially in the European Union, the US, and Asian countries such as the Republic of Korea, but the dearth of such options in India affects the competitiveness of the industry and the ability of critical products to reach the market in a reasonable time frame and at an affordable price.

India has strong and well-developed capabilities in the pre-validation and large-scale manufacturing stages where the industry’s research and the bulk of private investment are focused; however, critical technology and knowledge gaps exist in pilot-to-market stages of the product development lifecycle. Firms, and in particular, micro, small, and medium enterprises (MSMEs), lack access to technology and equipment tailored to specific needs across poorly developed stages of drug development, such as basic and applied research, clinical trials, and validation. While infrastructure, technology, and human capital are critical to successful innovation, the levels of investment required and appropriation problems make it prohibitive for individual firms to pursue these investments. In countries that have been successful in building effective innovation ecosystems, partnerships among government, the private sector and academia have eased access to these shared facilities and public goods.

Research shows that relative to other regions, a much larger share of innovation in South Asia takes place in-house, limiting productive collaboration across firms and possibly explaining high rates of imitation instead of radical innovation. Cooperation to strengthen interactions and linkages across the various stakeholders in innovation processes is an essential pillar in the innovation ecosystem.