Inorganic investments in Pharma R&D expected to rise
November 22, 2013: Inorganic investments in Pharma research and development (R&D) are expected to gain momentum in the medium term as Indian pharmaceutical companies are increasingly investing in developing their R&D skills. Indian pharma companies have developed R&D capabilities to target complex segments like injectables, inhalers, opthalmics and even biosimilars, and have been investing a higher proportion (around 6.5 to 8 per cent) of their sales in R&D activities over the past few years.
"We believe that there three key drivers for higher R&D spending by Indian companies - a) increased pace of product filings in US and Europe, b) focus on complex generics, some of which require clinical trials to demonstrate basic safety and efficacy and c) investments in developing biosimilars for emerging markets and eventually for developed markets," said the report from ICRA.
The report also highlighted that inorganic investments are expected to gain momentum in the medium term as companies are looking at a stronger presence in emerging markets and build expertise in select therapy areas. The fast-growing branded generics markets in South-East Asia, Latin America and even some of the markets in East Europe are expected to interest the Indian pharmaceutical companies. Also, investments to add technical capabilities in selected therapy areas or delivery systems are expected to continue going forward because of the increasing focus on complex generics.
The strong growth, both in the domestic and exports market, has encouraged Indian pharmaceutical companies to invest more in the R&D segment. Indian companies are expected to continue to invest in resources for adopting stringent manufacturing standards and compliance to good manufacturing practices.