Global Life Sciences Cluster Report 2011 - Jones Lang LaSalle

India
Industry framework
Innovation capacity
India benefits from a well-educated, English-speaking
labor force and enjoys a sizable share of chemists, all crucial
components of its robust manufacturing business. Low
levels of academic collaboration and a shortage of high-tech
professionals, such as molecular biologists have limited the
growth of R&D. This is partially offset by an increase in the
number of Indian scientists who have opted to return home
from abroad.
The clinical trial business in India, running at about 45 billion
rupees ($1 billion) 1 in revenue annually, benefits from the
country’s large, genetically diverse and medically naive
population, which means trials can be conducted quickly and
at low cost compared with trials in the West.
Innovation capital
One of the biggest challenges for India’s budding biotechnology
sector continues to be lackluster R&D investment. Market leaders
such as Ranbaxy and Dr. Reddy’s Laboratories allocate only
5–10 percent of their revenues on R&D, compared with an
average 15 percent spent by Western pharmaceutical companies.
A number of Indian pharmaceutical companies have spun off
their R&D divisions into separate units in hopes of attracting
investment capital and scaling up operations. However,
the approach has not been as successful as hoped. Some
companies now seek to reduce risk through R&D collaboration
with other companies.
86 Asia Pacific | Jones Lang LaSalle
Fiscal & political resources
Recognizing the importance of current and future states of the
life sciences industry, the central and state governments have
developed measures to support various aspects of the industry.
On the biotechnology front, the Indian central and state
governments have put competitive tax concessions in place
to encourage R&D and support the formulation and distribution
aspects of the value chain. In addition, they created an
“abbreviated new drug application” to reduce product
approval delays.
A few of the tax concessions include:
■ Tax holidays for industrial operations established in free
trade zones or under-developed areas
■ Deduction of profits earned from exports
■ Liberal depreciation allowances
■ Deduction of capital R&D expenditures
■ Relief on all contributions to approved domestic
research institutions
■ For pharmaceutical manufacturing units, an additional
weighted deduction of 200 percent for expenditures
related to in-house R&D
■ A new provision provides 125 percent weighted deduction for
expenditures incurred towards outsourcing of R&D activities
The Biotechnology Industry Partnership Programme (BIPP)
has been launched by the Department of Biotechnology
(DBT) to support high-end biotechnology research capable of
generating globally recognized intellectual property. Additionally,
a proposal is in place to create the National Biotechnology
Regulatory Authority (NBRA), expected to be an autonomous
body formed specifically to regulate the biotechnology segment
and reduce regulatory overlap.
Tof C