Development of the Pharma and Biotech Industry in India with Focus on R&D Activities

Abstract

India's pharma and biotech industry has recognised that they cannot survive as global players without significant R&D capabilities. In the pharma industry this has resulted in an increase in R&D spending as a percentage of sales from an average of 2% to around 10% over the last 5 years. Since 1995, total pharma industry R&D spending has grown from around USD 30 million to more than USD 495.2 million in 2005 (Fig. 1). The vast majority of the national pharma industry's R&D expenditures on new drug discovery and development is conducted by a limited number of companies, e.g. Dr. Reddy's (2006: 12% of annual sales) and Ranbaxy (2006: around 7%).The biotech sector in India is among the fastest growing knowledge based sectors, growing from USD 800 million in 2003 to USD 1.45 billion during 2005, and reaching USD 2 billion in 2006. The biotech industry has invested around 25% of its revenues over the last few years with a high proportion of the investments going into the setting up of infrastructure, followed by R&D.