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Leveraging affordable innovation to tackle India’s healthcare challenge

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This article was originally published by Kiran Mazumdar Shaw in IIMB Management Review under a Creative Commons license.

Abstract

Affordable innovation, which presents ways to innovate, be flexible, and do more with less, can help a complex and resource-constrained country like India address challenges in healthcare delivery. Such a model can ensure that healthcare is ‘available’ and ‘accessible’ to every citizen of the country on a sustainable basis. For this, the nation’s innovation capability needs to be enhanced through the right kind of fiscal incentives, policy support, financing mechanisms, human capital and best-in-class infrastructure. The aim should be to create a virtuous cycle of basic and applied science where knowledge is seamlessly translated into practical solutions to address unmet healthcare needs.

Introduction

Affordability is the key to accessibility. In the economic reality of a developing country, cheaper drugs and low-priced healthcare infrastructure models can work wonders. We need only look at the hope that cheaper generic medicines have brought to Africa’s AIDS patients to realise the amazing transformative potential of affordability. 1

However, affordability is not simple to implement; it requires creative, out-of-the-box thinking. To deliver affordability, we require innovation – innovation in discovering drugs, developing therapeutics and delivering healthcare. It is only by creating innovation in technology, strategies, practices and policies that we can take on local and global healthcare challenges.

India’s contribution to affordable healthcare goes much beyond being a pharmacy of the world. It extends to affordable innovation which goes to the core of ensuring a global right to healthcare.2 Helped by a significantly lower cost base that supports a large talent pool of scientists and engineers, India’s research engine is now driving a new model of innovation that draws on the philosophy of affordable access.

With returns on investment plummetting to unsustainable levels in the West,3 companies are now rapidly leveraging India’s “affordable innovation” platform through outsourcing, risk-sharing, and co-development partnerships. GE’s Research Centre in India has developed a number of low-cost bio-medical equipment from scanners to portable electrocardiograms as has Bristol-Myers Squibb developed a number of promising novel drugs at its partnered research centre in Bangalore. Biocon, on the other hand, has not only developed insulins in India indigenously through a proprietary technology in the early 2000s, but has also developed and delivered two affordable novel biologics for the benefit of cancer and psoriasis patients in India. India is therefore proving its mettle as a “laboratory for the world” that can deliver affordable innovation and a growing number of collaborative efforts are succeeding in delivering products and services that can go a long way in ensuring that the right to healthcare becomes truly universal.

It is not just drug makers; a few remarkable Indians such as cardiac surgeon Dr. Devi Shetty are striving to make access to quality healthcare non-discriminatory. The founder of Narayana Health has successfully leveraged technology and economies of scale to make medical care accessible and affordable to the masses. His hospital in Bangalore offers heart surgeries at a fraction of what it costs in developed countries, and is a medical Mecca for patients from Africa, South & South East Asia, and the Middle East. The hospital charges an average of USD 2,000 for open-heart surgery, compared with USD 20,000-100,000 in America, but its success rates are as good as in the best American hospitals.4 His business model is being leveraged in the Caribbean through the establishment of a hospital in the Cayman Islands in partnership with Ascension Health, a leading healthcare provider in the US.

India faces huge healthcare challenges

Developing countries such as India are confronted with a host of daunting challenges such as poverty, malnutrition and an enormous disease burden, all of which are interconnected in a vicious circle – poverty leads to malnutrition, leading to illness.

Further, India is grappling with a non-communicable diseases (NCDs) crisis. Cardiovascular diseases, cancers, chronic respiratory diseases, diabetes, and other NCDs are estimated to account for 60% of all deaths in India, making them the leading cause of death, ahead of injuries and communicable, maternal, prenatal, and nutritional conditions. Non-communicable diseases not only affect health, but also productivity and economic growth. The probability of death during the most productive years (ages 30-70) from one of the four main NCDs is as high as 26%. India stands to lose USD 4.58 trillion before 2030 due to NCDs and mental health conditions. 5

Moreover, as India ages, it is likely to find the burden even heavier. While the overall population of India will grow by 40% between 2006 and 2050, the population of those aged 60 years and above will increase by 270%. Elderly Indians will make up 20% of India’s population by 2050, which means healthcare costs could jump substantially as a significant number of people will need frequent hospitalisations and regular follow-up and preventive care.6 Between 2010 and 2020, elderly healthcare expenditure in India is estimated to grow at a CAGR of 22% to USD 44 billion.7

Low public investment in preventive healthcare is one of the key reasons behind the poor health of the average Indian. Despite the private sector’s efforts to promote preventive healthcare through corporate social responsibility (CSR) initiatives, there is a major lacuna in programmes to prevent water-borne, hygiene-related and non-communicable diseases, as well as those to improve maternal and child health.

The lack of focus on preventive healthcare coupled with low health awareness and education weigh on India’s health indicators. In 2015, India recorded 1.3 million deaths of children under the age of five years – the highest in the world. Poor knowledge of dietary requirements during pregnancy means unhealthy mothers give birth to babies with low birthweight who are then susceptible to diabetes, heart disease and other chronic illnesses in adulthood. The tragedy is that a young woman dies during childbirth every 10 minutes somewhere in India8 and 3 lakh children die the day they are born due to mostly preventable causes.9 Malnutrition is responsible for 50% of all childhood deaths in the country.

Further, India is hamstrung by weak public healthcare infrastructure, lack of advanced laboratory facilities and equipment, and an inadequate health workforce, along with a poor healthcare delivery mechanism.

It is pertinent to note here that despite the fairly rapid pace of economic growth India has experienced in the last 20 years government expenditure on healthcare is only 1.04% of GDP, which is about 4% of total expenditure. Per capita government expenditure every year on health is Rs 957 at current market prices (USD 1 = INR 65.04), 10 among the lowest globally.

Not only does the government spend too little but it also spends badly and fails in performing its role of a healthcare provider. Despite accounting for 20% of the global disease burden, the existing Indian healthcare infrastructure is far from being sufficient to address the prevailing healthcare needs. A severe lack of resources means that in comparison to World Health Organisation’s (WHO) stipulated minimum doctor to patient ratio of 1:1,000, India has only 0.7 doctors per 1,000 patients. 11 Currently, 0.9 million more doctors are required to meet the global average of 14.1 doctor per 10,000 people. Moreover, in comparison to WHO’s stipulated minimum ratio of 2.5:1000, India has only 1.7 nurses per 1,000 patients.12 An additional 2.4 million nurses are required to meet the growing demand.

What makes matters worse is the low penetration of health insurance in India. The latest National Sample Survey Organisation (NSSO) Survey on Health and Morbidity (2014) says that only 13% of the population is covered by government funded insurance schemes. Coverage among the poorest sections in both rural (10.6%) and urban areas (8.6%) is even lower, leaving out large sections of intended beneficiaries. Between 2004-05 and 2011-12, NSSO data suggest, hospitalisation expenses have risen faster for poorer households despite increased insurance penetration. 13

Healthcare access in India is affected with the 70:70 paradox; 70% of healthcare expenses are incurred by people from their pockets, of which 70% is spent on medicines alone, leading to impoverishment and indebtedness.14 Healthcare costs are more impoverishing than ever before and almost all hospitalisations, even in public hospitals, lead to catastrophic healthcare expenditure and over 63 million people are facing poverty every year due to healthcare costs alone.15

“India has a great tradition and capacity for innovation in most areas, but despite having the technical capacity to manufacture any drug, its role in new drug discovery and drug innovation including in biopharmaceuticals and biosimilar, even for its own health priorities is limited,” the Ministry of Health and Family Welfare says in its National Health Policy 2015 Draft.

The draft goes on to say that “drug innovation and new drug discovery are important aspects of access,” adding, “Government policy would be to both stimulate innovation and new drug discovery as required to meet health needs as well as ensure that new drugs discovered and brought into the market are affordable to those who need them most.”

Affordable innovation can address issues of availability and access

Cancer cases in India are expected to jump from around 14 lakh in 2016 to over 17.3 lakh by 2020. Deaths due to cancer are projected to go up from 7.36 lakh to over 8.8 lakh in the next four years, according to the cancer registry released by the Indian Council of Medical Research (ICMR). Breast, lung and cervical cancer top the list of new cancer cases, the data show. Over 1.5 lakh new breast cancer cases were estimated during 2016, which is over 10% of total cases. Cancer of the lungs is second with estimated 1.14 lakh new cases during 2016. Cancer of the cervix is the third most common cancer with estimated 1 lakh new cases in 2016. The incidence of breast cancer is projected to go up to 1.9 lakh by 2020.16

Out-of-pocket payments, which account for more than three-quarters of cancer expenditures in India, are one of the greatest threats to patients and families.17 A cancer diagnosis is increasingly responsible for catastrophic expenditures that push patients and their families into the medical poverty trap.

Studies show that the implementation of prevention, early detection and treatment strategies could potentially save 2.4 million-3.7 million lives globally every year— the vast majority of them in low- and middle-income countries —yielding an economic benefit in excess of USD 400 billion.18

India has recently seen the emergence of several start-ups that can offer affordable solutions for the early detection of cancer. Start-ups such as UE Life Sciences, OncoStem Diagnostics and mapmygenome are leveraging “affordable innovation” to come up with business models that can make early cancer detection available and accessible.

Mihir Shah’s UE Lifesciences is addressing a huge unmet medical need of early detection of breast cancer with portable devices such as the iBreastExam™ (or iBE). This innovative, FDA approved handheld device is being used by front line health workers to conduct onfield breast screening. It can detect clinically relevant breast lesions higher than 85% within five minutes and can generate results at the point of care. This device is a huge benefit over traditional mammography and other detection techniques involving radiography that are harmful as well as expensive, and hence unaffordable in the Indian context.

Similarly, Manjiri Bakre’s OncoStem Diagnostics is developing novel diagnostic tests to predict the risk of cancer recurrence in patients within the first five years of their initial diagnosis, based on the characteristics of their tumour sample. The knowledge of a patient’s risk profile can be critical in tailoring treatment regimens to minimise recurrence.

Mapmygenome, founded by Anu Acharya, is a molecular diagnostics and predictive health analytics company that offers a full range of tests to identify an individual’s genetic predisposition to lifestyle, metabolic, cardiovascular, ocular, skin and hair, orthopaedic, and gender-specific conditions. Based on the test results, Mapmygenome counsels people on how to reduce these health risks through lifestyle modification.

For those diagnosed with cancer, Navya Network has developed an online platform that allows patients and their families to consult leading oncologists from top institutes such as the Tata Memorial Hospital for a nominal fee. As this start-up allows patients to access expert advice on treatment modalities online, they can now save on costs associated with travelling to the hospital frequently for consultations.

Another start-up, Perfint Healthcare, has developed advanced robotic technology for image-guided cancer therapy, enabling doctors to perform quick, accurate and cost-effective interventional procedures such as biopsy and drug delivery.

The reason I mention these start-ups is that there is a common thread linking them – all of them are trying to make a difference by bringing affordable innovation to India.

Our country requires start-ups such as these that think locally but have the potential to make enormous global impact.

Affordable innovation is the only way forward, and India has a unique opportunity to deliver it to global markets by building excellence across the innovation chain from discovery to product and clinical development.

For this kind of innovation to happen in India, linkages need to be established between health research and national health programmes to ensure research findings are leveraged in decision making in public health. India needs to encourage the development of fundamental research in all areas relevant to health, such as physiology, biochemistry, pharmacology, microbiology, pathology, molecular sciences and cell sciences, to ensure drug innovation and discovery.

Pasteur’s Quadrant

Here, I would like to draw a reference to the book Pasteur’s Quadrant: Basic Science and Technological Innovation written by Donald Stokes. In his book, Stokes argues that in pursuing a model of innovation that combined elements of both basic and applied research Louis Pasteur not only made fundamental contributions to science but also laid the foundations of the entire field of microbiology. According to Stokes, Pasteur successfully demonstrated how application-oriented research is not inherently opposed to scientific creativity and rigour.

Translating a scientific idea into a product or a service that addresses an unmet need requires a strong understanding of basic sciences and their application; well-trained scientists working in advanced laboratories; a supportive infrastructure for scale-up and commercialisation; and an ecosystem that enables seamless transfer of knowledge into a practical commercial solution.

The rising incidence of chronic conditions such as diabetes, cancer and cardiovascular disease, as well as a plethora of infectious diseases pose an enormous challenge and a huge disease burden for the country. There is thus an urgent need to encourage “translational research” that leads to the transfer of knowledge gained through basic research into applied research.

For example, it is essential that India creates a comprehensive database of all tuberculosis (TB) cases in the country in order to ensure proper TB diagnosis, reduce TB transmission and address the emergence and spread of multidrug-resistant TB (MDR-TB). Such a database will allow regular monitoring of the patients to ensure that patients complete their treatment. Failure to ensure patients complete the whole course of treatment has led to the emergence of MDR-TB, which is now a major public health concern in many countries. Also, a treatment modality that helps improve compliance to treatment could contribute significantly to tackling MDR-TB. Such initiatives may do more to decrease morbidity and mortality from TB than a new class of drugs.

Though our research laboratories and medical institutions generate a wealth of medical data, techniques and innovations, much of this knowledge does not translate into public health action because of the absence of strong guidelines, adequate information systems, appropriate skills for programme implementation, strong advocacy and proper mechanisms for monitoring and coordination.

This is where the government needs to come in to help develop a platform for an effective partnership between clinicians and scientists through a multi-pronged approach for translational research. The government also needs to play a proactive role in helping the scientific and medical communities overcome the increasing costs and complexity of translational research and the accompanying regulatory burden.

The Mazumdar Shaw Center for Translational Research (MSCTR), a non-profit research institute housed at the Mazumdar-Shaw Medical Center (MSMC) in Narayana Health City, follows a research-led hospital model rarely seen in India. It gives scientists at MSCTR the opportunity to work very closely with clinicians at MSMC in areas such as head and neck cancer, tissue engineering and regenerative medicine, cancer immunotherapy and neuro-oncology to advance cancer diagnostics and treatment.

Biocon’s innovation matrix

The concept of Pasteur’s Quadrant finds echoes in Biocon’s four-pronged innovation matrix that spans the continuum from known developments to unknown ideas. Creativity in the known realm builds on existing knowledge leading to two types of innovation (incremental and evolutionary). Creativity that pushes unknown boundaries and creates new knowledge is experimental and breakthrough in its impact on human existence. A case in point are novel medicines (see Figure 1).

Figure 1: Biocon innovation matrix

By playing in all four quadrants of this innovation matrix, Biocon is able to create a balanced risk-reward profile. The company’s work on potentially the world’s first oral insulin and first-in-class anti-CD6 antibody, Itolizumab, has the ability to change the treatment paradigm in diabetes and immunology, respectively. This breakthrough innovation carries huge risks but the rewards, both financial and societal, are tremendous. Its collaboration with Quark Pharma on small interfering RNA (siRNA) therapy allows it to work on cutting-edge technology that, although experimental, could also be transformational with applications across multiple therapeutic areas.

Biocon’s innovation strategy also involves the development of affordable follow-on versions of biologic drugs, or biosimilars, to provide cost-effective alternatives to expensive reference biologics, which impose a tremendous strain on healthcare budgets for patients, payers and governments. Biosimilars are expected to provide cost-effective alternatives to expensive originator biologics for patients and an opportunity for governments across the world to rein in burgeoning healthcare spends. The savings from switching to biosimilars in the US alone are projected to be USD 250 billion between 2014 and 2024;19 the use of biosimilars in eight European Union countries can save up to EUR33 billion by 2020.20

Affordable innovation and Biocon

“Affordable innovation” has been a central driving force in Biocon’s business philosophy and its pursuit of science. A strong R&D is at the core to facilitate affordable innovation as Biocon views innovation not just as the development of novel molecules but also considers it as any novel activity to develop research-driven cutting-edge therapies through cost-effective techniques. Biocon has consciously chosen to focus in segments such as biosimilars, complex generics and novel biologics, which require intensive R&D efforts and long gestation periods.

The company has focussed relentlessly on chronic disease spaces such as diabetes, cancer and autoimmune conditions, marked by relatively unmet needs. The pursuit of innovation has led Biocon to acquire the knowledge, expertise and skills essential to develop technology-intensive premium products for these chronic diseases. The company has also commissioned operations in locations where it can leverage the advantages of cost and scale. Over time, it has emerged as a highly innovative biopharmaceuticals enterprise that delivers affordable pricing across the value chain comprising small and large molecules, thus enhancing global access to otherwise expensive therapies.

At Biocon, the endeavour has been to deliver transformational innovation, while keeping it affordable and accessible. Biocon has been able to leverage India’s scientific skill base to develop novel and differentiated therapies for chronic diseases, where either access was unaffordable or medical needs were unmet.

Novel molecules

Biocon is leveraging its expertise in drug discovery and development processes, cutting-edge infrastructure as well as best-in-class manufacturing capabilities to build a unique Novel Molecules pipeline. These molecules are aimed at addressing local as well as global unmet medical needs in the areas of diabetes, autoimmune/inflammation and oncology. The company’s objective is to translate breakthrough innovative ideas into affordable, yet transformative, high quality medicines for patients globally. The company’s pipeline is spread across the entire drug discovery and development value chain that takes advantage of its end-to-end capabilities from discovery through regulatory as well as therapeutic area expertise, built over the years. These novel molecules span a wide range of platforms and products and include conventional peptides and monoclonal antibodies (MAbs), novel fusion MAbs, and small interfering RNA (siRNA) that have either been discovered in-house or in-licensed through strategic partnerships.

To translate its new molecule discoveries to the clinic more effectively, Biocon has strengthened its already existing translational sciences capabilities by building a dedicated and experienced scientific team within R&D and has entered into key collaborations. A part of this team is housed at the MSCTR to collaborate with clinicians at the MSMC. Biocon is also working on translational sciences with global academic institutions such as Harvard University, Massachusetts, US and Trinity College, Dublin, Ireland.

Diabetes

Biocon is now harnessing its capabilities in novel drug discovery research to advance an exciting oral Insulin through the clinics. Insulin Tregopil, a high potential oral insulin analogue for Type 1 and Type 2 diabetes patients, is one of the company’s key novel molecule programmes. Biocon had declared positive results from the Phase I studies in January 2016. The results of the study conducted in the US have established the important role of Insulin Tregopil in post-prandial glycemic control. It has demonstrated fast action of Insulin Tregopil with distinctive properties compared to other prandial insulins such as Aspart. As a prandial insulin, Tregopil can prove to be a powerful weapon in the battle against diabetes. JDRF, the leading global organization funding Type 1 diabetes research and advocacy worldwide, is supporting a global multiple ascending dose study with Tregopil in people with Type 1 diabetes. The company has also filed a Clinical Trial Application with the Indian drug regulator for a Phase II/III study with Insulin Tregopil in Type 2 diabetes.

Autoimmune/Inflammation

Biocon is developing a number of molecules addressing unmet needs in the autoimmune and inflammation disease areas. The portfolio spans a diverse set of targets and therapeutic modalities.

A novel first-in-class anti-CD6 humanised monoclonal antibody, Itolizumab, is being marketed as ALZUMAb™ for the treatment of chronic plaque psoriasis in India since 2013. Biocon is the first and the only company in the world to clinically validate CD6 as a target for autoimmune diseases. This novel monoclonal antibody is undergoing a Phase I study in Australia.

The study is expected to enable a global IND filing with a subcutaneous route of administration. The distinct mechanism of action of Itolizumab compared to other available therapies has the potential to unlock key differences in safety and efficacy in multiple autoimmune diseases such as psoriatic arthritis and multiple sclerosis.

Biocon is the first biopharma organisation in India venturing into the exciting space of siRNA-based (small interfering RNA) therapeutics. It has made significant progress in its collaboration with Quark Pharma in advancing two siRNA based programmes, QPI-1007 and QPI-1024. A pivotal global Phase III study investigating QPI-1007 in Non-arteritic Anterior Ischemic Optic Neuropathy (NAION) patients is ongoing. QPI-1024, the siRNA programme to treat graft dysfunction in lung transplant patients, is in the preclinical stage.

Oncology

Novel immune checkpoint inhibitors have created much excitement in the field of cancer in general and cancer immunotherapy in particular. Monotherapy as well as combinations of approved and investigational checkpoint inhibitors are currently being tested in the clinics with much anticipation of better patient outcomes. Biocon is building an exciting pipeline of fusion MAb molecules with the concept of preferentially delivering immune modulators to tumour sites, thereby enhancing efficacy while limiting systemic toxicity.

Biocon’s lead molecule in this programme, FmAb2, is currently in advanced preclinical development. It provides Biocon with a potentially broad clinical opportunity in multiple tumour types.

Biosimilars

Biocon’s commitment to bring high quality, yet affordable, biosimilars to a global patient pool led the company to develop the technology, critical mass and skillsets for producing these complex molecules at a time when there were few credible global players. Over the years, Biocon has invested extensively in R&D to reinforce its scale, competence and pioneering advantage in biosimilars. Today, the company has among the largest and most diversified portfolios of biosimilars, spanning monoclonal antibodies, generic insulin and insulin analogues and other recombinant proteins. More importantly, the portfolio addresses many critical chronic diseases such as diabetes, cancer and autoimmune disorders. The company is among the pioneers in bringing the benefit of high quality affordable alternatives to reference biologics to patients in India and other emerging markets.

Biocon’s focus on the development of biosimilar technology to enhance drug affordability is reflected in the cost optimisation of insulin in India. Biocon entered the diabetes space at a time when the disease was assuming epidemic proportions in India but treatment was by and large inaccessible to most due to the high cost of treatment. In 2004, the company successfully introduced India’s first indigenously developed recombinant human insulin using a proprietary fermentation technology platform. The introduction of Biocon’s recombinant human insulin, Insugen®, at a fraction of the price of imported insulins compelled MNC brands to drop prices, which hugely benefitted diabetes patients. Biocon also launched Basalog®, a long-acting basal Insulin Glargine for Type 1 & Type 2 diabetes, at an affordable price point in 2009. Over time, Biocon has enhanced patient access to Insulin in India as well as several emerging markets through affordable insulin therapy, resulting in improved diabetes management.

Biocon also introduced the world’s most affordable follow-on biologic Trastuzumab (CANMAb™) in 2014, enhancing access to a key treatment for HER2-positive metastatic breast cancer in India. Biocon has also commenced Trastuzumab sales in emerging markets and expects to take this important biosimilar drug to several more markets in the future.

To take its biosimilars to a global patient pool, Biocon has partnered with US-based Mylan for the co-development of a high-value portfolio of six biosimilars for oncology and autoimmune indications – Trastuzumab, Pegfilgrastim, Adalimumab, Bevacizumab, Etanercept and Filgrastim – and three generic insulin analogues – Glargine, Lispro and Aspart. The two companies have one of the longest-standing partnerships in the global biosimilars space with a leadership position in the nascent industry. Building on their early mover advantage in the global biosimilars space, Biocon-Mylan have put three of their advanced biosimilar assets – Trastuzumab, Pegfilgrastim and Insulin Glargine – on track for anticipated regulatory approvals in developed markets. Biosimilar Trastuzumab, co-developed by Biocon and Mylan, became the first such product to be unanimously recommended for approval by the U.S. Food and Drug Administration (FDA) Oncologic Drugs Advisory Committee (ODAC).

Affordable innovation and India’s emergence as “pharmacy of the world”

Worldwide pharmaceutical R&D is expected to grow from USD 141.6 billion in 2014 to USD 160 billion in 2020.21 As an extension of this reality, the estimated cost of bringing a new chemical or biological product to market has more than trebled from USD 451 million in 2004 to USD 1.5 billion in 2013.22 Translating great laboratory discoveries into clinical success is a major challenge for the global pharma industry. While the R&D expenditure has been on the upswing, the number of new drugs approved by the U. S. Food and Drug Administration (FDA) per billion U.S. dollars (inflation-adjusted) spent on R&D has halved roughly every nine years.23

High failure rates are leading to escalating costs of drug development and the drying up of R&D pipelines. Lack of availability and testing in relevant animal models of disease, understanding of pharmacokinetic (PK) and pharmacodynamic (PD) relationship, access to and testing in patient samples, selection of right patients and precision medicine approach are some of the key factors contributing to this failure.

The spending per New Molecular Entity (NME), based on a three-year lag period between R&D expenditure and NME approval, was USD 2.7 billion per NME in 2014.24This kind of figure is staggering by the emerging world standards. This high investment in R&D – and the risks associated with it – is one reason why the Big Pharma has shown a noticeable lack of enthusiasm to invest in developing medicines and therapies for “non-profitable” diseases that so plague the poorer countries.

India has managed to fill this gap by creating a successful, cost-effective generic pharma industry by first reverse engineering patented drugs and adopting disruptively innovative process engineering to deliver affordable pricing. A strategy of delivering the highest quality at the lowest cost, has enabled the Indian pharma industry to bring affordable medicines to patients in the country and other developing ones at price points that made them affordable and thus accessible. Generic producers in India drastically brought down the prices of vaccines and life-saving drugs used to treat diseases such as HIV, TB and diabetes over the last couple of decades.

In the late 1990s, Hyderabad-based Shantha Biotechnics introduced a recombinant Hepatitis B vaccine at a fraction of the cost of Western drug makers. At the time, large multinational pharmaceutical companies held monopolies on the recombinant Hepatitis B vaccine, which was priced at over USD 25 a dose and was thus unaffordable for most Indians. Shantha Biotechnics saw an unmet need domestically and invested in innovation that led to India’s first recombinant Hepatitis B vaccine that cost less than USD 1 a dose. By 2006, Shantha Biotechnics and Bharat Biotech had disrupted the MNC monopoly for Hepatitis B vaccines not only in India but throughout the developing world with the help of WHO and UNICEF. In 2009, Shantha sold over 120 million doses of vaccines.25 Today, India’s biopharmaceutical sector is a world leader in vaccines, producing 60% of the world’s supply. India is supplying more than half of all the vaccines to international organisations, such as the WHO and the UNICEF.26

The Indian pharma industry became a champion of HIV patients in Africa more than a decade ago by using its cheaper manufacturing base to sell AIDS drugs at a deep discount and save millions of lives. In 2001, Cipla offered to sell a three-drug AIDS cocktail for a fraction of the price charged by global drugs firms. Cipla priced the drug for developing countries at USD 350-600 per patient per year, instead of the USD 10,000-15,000 charged for the patent protected version in industrialised countries.27 By 2008, 96 of 100 countries reported purchases of anti-retroviral drugs from Indian generic producers.28

Pharma manufacturers in India can produce bulk drugs that cost 60% less than those in the West and can open a production plant in India 40% cheaper than in developed countries. This has helped India emerge as a hub for pharmaceutical research and development and clinical trials for many leading foreign pharmaceutical companies.29 A lower cost base combined with a robust and ethical regulatory environment has enabled India to emerge as a vital producer of affordable medicines and the world’s largest supplier of affordable generic drugs.30 India’s pharmaceutical industry exports to over 200 countries and is the second largest supplier of over-the-counter and prescription drugs to the US market.31

Multiple challenges to innovation in India

In today’s knowledge-driven economy, innovation is the primary driver of progress. India’s ability to generate wealth and create social good will come to naught unless we monetise innovative ideas by unshackling our entrepreneurial spirit. Innovation in India, however, faces several systemic, cultural and regulatory obstacles. As a result, the Global Innovation Index (GII) 2017 ranks India at 60th position, behind countries like Ireland (10), South Korea (11) and China (22). Switzerland tops the list and the U.S. is at 4th position.32

Multiplicity of regulations

India ranks poorly on GII because ease of starting a business is a “persistent matter of contention in India.” A highly complex compliance regime and heavy bureaucratic interference presents regulatory hurdles to entrepreneurs, discouraging them from effectively starting and running businesses.33

Consider the example of India’s biotechnology industry, which continues to be challenged with a draconian Biodiversity Act encompassing archaic policies that deter entrepreneurs from engaging in any economic activity that involves genetic derivatives of India’s ecological resources. There are a number of large and lucrative value-added manufacturing opportunities which can leverage India’s biodiversity-based natural resources. However, until the Act is rewritten, this potential will remain trapped in bureaucratic mire. Biotechnology in India has to face a maze of rules and regulations, involving multiple ministries and government agencies, which influence every single aspect of the industry. These obstacles have prevented India from realising the true potential of agri-biotechnology. Apart from Bt-cotton, which was approved in 2004, not a single genetically modified agricultural crop has been approved in the country. Unwarranted public outcry fuelled by unscientific propaganda spread by anti-GM lobbies has denied India the benefits of new technologies that aim to provide food security to a country that will have the largest population on the planet to feed.

Similarly, India’s prospects in the area of drug discovery and innovation took a big blow in 2013 when the entire India clinical industry had to face a spate of negative media coverage and misdirected NGO activism over the actions of an errant few. Reacting to complaints and public interest litigation (PIL) petitions filed by NGOs, India’s Supreme Court put all trials of new drugs on hold in 2013. The government responded by introducing unduly onerous regulatory requirements for clinical trials. The resulting uncertainty led to pharmaceutical sponsors and contract research organisations pulling out of India and taking their trials to China and other Asian countries.34 The lull in clinical trials activity led the Indian government to announce a series of steps that could help revive clinical research and testing of innovative drugs.35

Low risk appetite

Real innovation has an inherent element of high risk, which investors in India are averse to. Instead, they prefer predictable, imitative business models and me-too products, where they have the visibility of assured returns. Thus, Flipkart – which is modelled on Amazon.com – has received much investor interest in India. Flipkart has raised over USD 3.2 billion till date.36

In India, nobody is willing to value any innovative company or start-up until they see an assured revenue stream. That is why the country has very few angel investors, who traditionally drive significant early-stage investments in countries with high entrepreneurial activity. Apart from capital, angel investors also provide mentoring and network access to entrepreneurs. They play a critical role in scaling up businesses to make them attractive for institutional investors such as venture capital funds.

In 2011, angel investors in India invested only about Rs. 100 crore in around 50 deals as compared to Canada, where they invested Rs. 2,000 crore. As a proportion of early-stage investing, angel investments in India comprise around 7% as against around 75% in the US. 37

India also lags in early-stage venture capital investing. Annual investments are around Rs. 1,200 crore as against Rs. 29,000 crore in the U.S. and Rs. 3,000 crore in China. Around 90% of the early stage venture funds in India come from offshore sources rather than from domestic investors.38

Stagnant R&D spending

Globally, the pace of economic and industrial progress is directly proportional to the efforts made towards research and development (R&D), which acts as a reliable measure of innovative capacity. However, India’s spending on R&D has been at best modest over the last decades. In the decade from 2004 to 2014, India’s gross expenditure on R&D (GERD) as a proportion of GDP either stagnated at a little less than 0.9% or even relatively declined when adjusted to inflation. During the same period, the Chinese figure witnessed a jump from 1% to 1.9% of GDP. China’s economy is three to four times larger than the Indian economy. It is investing at least five times more money in R&D than India.39

Poor access to capital

Compared to developed nations, the availability and access to equity and debt for micro businesses and start-ups in India are relatively low, which fails to foster R&D-driven innovation in the micro, small and medium enterprises (MSMEs) sector. Among the formal financial institutions, commercial banks constitute the largest source of financial assistance to MSME sector at about 87% as at end March 2011. At the beginning of 12thPlan period, i.e. as at end FY 2011-12, the total credit supply met only 38% of the total credit demand, thereby leaving a 62% credit gap in the MSME sector.40

The lack of access to funds results in limited technology adoption within SMEs, leading to system inefficiencies that lower national productivity. India’s SME sector employs 40% of India’s overall workforce but contributes only 17% to the nation’s GDP. In comparison, the German Mittelstand (GM), comprising SMEs, accounts for almost 60% of the employment within Germany and contributes more than 50% to the national economic output.41

India also lacks a robust pipeline from the financial markets to genuine, innovative start-ups. This has forced biotech companies such as Bangalore-based Strand Life Sciences to explore an overseas listing to access capital through a reverse merger with a NASDAQ-listed firm. However, Strand failed in its attempt to list on the Nasdaq,42underscoring the fact that raising capital for expansion is a daunting task for Indian biotech companies.

Biotech start-ups fail to show up on the radars of venture funds. Entrepreneurs struggle to go from angel investment or first round of VC funding to the second and third rounds.43No life science business of scale has come up in nearly 15 years.44 In fact, it is the Indian government that is basically playing the role of a venture fund for the biotech industry. The government has come forward to provide seed capital and risk capital. It is investing in start-ups and funding their efforts to take forward their ideas to the proof-of-concept stage and beyond.

In 1990, the government set up the Small Industries Development Bank of India (SIDBI) for the promotion, financing and development of MSMEs in India. SIDBI introduced low-interest debt instruments, which in today’s parlance is similar to seed funding, which helped companies such as Biocon to scale up.

However, even at the proof-of-concept stage and beyond, where venture funds usually step in with “accelerator funding”, nobody from the private sphere is ready to come forward. Here too, the government is providing the capital.

Between 2005 and 2008, India’s Department of Biotechnology initiated two flagship funding schemes – the SBIRI (Small Business Innovation Research Initiative) and BIPP (Biotechnology Industry Partnership Program) – aimed to provide capital in the form of soft loans and grants for biotech innovation that had crossed the proof-of-concept stage. Earlier in 2001, the CSIR (Council for Scientific & Industrial Research) had initiated the NMITLI (New Millennium Innovation Technology Leadership Initiative) programme, which led to several industry–academia research partnerships and also created the right framework to enable scientists to pursue their entrepreneurial aspirations. Apart from these, various state governments, especially Andhra Pradesh and Karnataka, established innovation funds to address the needs of biotech companies.

In 2011, the Government of India took a landmark decision to create a unique organisation, the Biotechnology Industry Research Assistance Council (BIRAC), which would consolidate all industry funding schemes.

BIRAC was a first-of-its-kind initiative with a mandate to strengthen and empower the innovation capacities of biotech entrepreneurs and provide an enabling ecosystem. BIRAC has emerged as the biggest source of early stage funding for first-time or existing biotech entrepreneurs. It has supported over 100 entrepreneurs, close to 300 companies and strengthened 150 small and medium enterprises. The 15 bio-incubators it has supported in different institutions, with at least Rs 100 crore in investment, are meant to promote “bio-entrepreneurship” and “biology-inspired research and innovation”. 45

Today, venture funds, in terms of the technology story, are investing very heavily in IT start-ups which are very exciting and have a very short gestational timeline. They have easy-to-understand models. There’s much money chasing those start-ups because they either get acquired very fast by bigger companies or they are able to quickly create a buzz around their business, and everyone can kind of relate to that business. Biotech is very different because the gestational timeline is many years.

The toughest challenge Indian biotech start-ups face today is in convincing investors to financially back an incomprehensible field such as biotechnology. As the business model is difficult to understand, investors tend to be wary. This is why we have a situation in India today wherein neither the market nor venture capitalists value innovation.

Shortfall of scientific talent

Today, the rapid pace at which scientific knowledge is advancing puts a high demand on highly skilled scientists and engineers. India is witnessing an increasing gap between the skills that the nation requires and what is currently available. While the availability of manpower in general skill capacity is quite abundant in India, there is a severe talent crunch in high-skill areas. With barely 200,000 researchers in a country of over 1.2 billion people, India has one of the lowest densities of scientific workforce, ranking even below Chile and Kenya when it comes to research workforce density in the labour population.46

The Global Innovation Index (GII) 2015 report also ranks the country poorly on innovation sub-indices: institutions (ranked 104th), infrastructure (87th). The report said India’s position has deteriorated in human capital and research (103rd), market sophistication (72nd), business sophistication (116th) and creative outputs (95th).47

The report goes on to say that India’s higher education sector is currently confronted by poor teacher quality, constraints in research capacity and innovation (owing to low enrolment in PhD programmes, few opportunities for interdisciplinary working, a weak innovation ecosystem in academia, and low industry–university collaboration), and a large socioeconomic disparity.

There are no Indian universities in the world’s top 250 list based on the Times Higher Education World University Rankings, which is a list of the world’s best universities. India’s best, the Indian Institute of Science, Bangalore, is ranked between 251 and 300. It is the only Indian higher-education institution in the top 300. In comparison, China has three universities in the Times’ top 100 universities list.48

India has scored poorly in the international Programme for International Student Assessment (PISA) tests, lagging behind many other emerging nations. The country also has a lower tertiary enrolment rate than nations such as China, Brazil, Indonesia and Vietnam.49

To address the skill deficit in biotechnology, the Government of Karnataka under the Millennium Biotech Policy-II has set up Biotech Finishing Schools across the state. These institutes impart professional skills to biotech graduates to make them employable across the sector. Biocon, on the other hand, has set up Biocon Academy, which is a one-of-its-kind Centre of Excellence for Advanced Learning in Applied Bio-Sciences, as an extension of its CSR. The Academy is developing a new cadre of life sciences professionals with specialised skills for the Indian biotech industry. Biocon aims to bridge the skill deficit of the biotech sector by providing international quality experiential learning to aspiring biotech professionals. Nearly 300 students have been trained on a scholarship from Biocon so far and are employed at leading pharma and biotech companies in India today.

Low patent filings

Low patent literacy in India, little incentive for patent filings, abysmal R&D spends and a resource-starved intellectual property (IP) administration have led to a situation where India ranks way behind other countries in terms of patents.

In 2014, India filed nearly 1,400 patent applications under the World Intellectual Property Organisation’s (WIPO’s) Patent Cooperation Treaty (PCT), which enables inventors to seek protection for their discoveries in various countries. In the same period, China filed 18 times as many international patents as India. Japan filed 30 times as many and Korea’s count was 9 times more. The U.S., which has emerged as the “fountainhead of innovation”, filed over 61,000 patent applications, 44 times more than India.50

Going by international patent filings, which reflect the innovation potential of a country, the U.S., Japan, China, Germany and South Korea are right there on the top of the world.

India also paints a rather dismal picture in terms of patents filed per million population. In 2013, India registered 34.4 patents per million population in comparison to 4,037 by Korea, 2,579 by Japan, 1,806 by USA, 607 by China and 357 by United Kingdom. 51

The poor state of the patents administration system is also a big hindrance to innovation in India. Over 237,000 applications were pending in India’s four patent offices as of April 2016, according to Commerce Minister Nirmala Sitharaman.

India must incentivise innovation

The imperative to be “future ready” is leading nations to identify key thrust areas for research and innovation and then nurturing them with the right kind of fiscal incentives, policy support, financing mechanisms, human capital and best-in-class infrastructure.

In several Western nations, governments that used to promote big-ticket R&D projects and top-down innovation policies are recognising the limits of these growth strategies – especially in a recessionary climate. As a result, visionary American and European policy makers are investing in — and supporting —bottom-up innovation programmes.52

Bottom-up innovation can provide accessible and affordable solutions to meet the challenges that India faces. The government must realise that encouraging technopreneurs in the small and medium enterprises sector will create a compelling opportunity to take innovative ideas to global markets. A large reservoir of entrepreneurial energy in India is waiting to be tapped. It is by investing in breakthrough ideas and embracing entrepreneurship as an economic model of growth that India will be able to unleash the power of innovation to ensure a better life for its billion-plus citizens.

Innovation, however, does not happen in a vacuum; it needs an ecosystem to foster it. Therefore, India needs to build an enabling ecosystem that unleashes the country’s entrepreneurial energy and allows the flourishing of a vast number of fast-moving companies that are small, nimble and innovative. This, in turn, will create a vast and vibrant market place of millions of small, medium and large enterprises symbiotically interconnected to deliver superior and sustainable solutions.

A path driven by R&D and innovation capital will be essential for India to manage its inherent challenges and to grow its GDP by 9% per annum to become a USD 10 trillion economy over the next two decades.53

Designing the innovation ecosystem in India would require the convergence of several factors.

Raise R&D spending

As a nation, we must invest in our research and innovation efforts with an aim to build competence and excellence. Science and technology needs to be recognised as a priority area for investment in our national agenda for economic development. India needs to raise GERD to 2% of GDP. Unless there is improved funding, Indian institutions cannot be in the forefront of research.

We need to have a few institutions which have infrastructure comparable to the best ones in the U.S. or Europe. We must adopt the clichéd 80:20 rule in investment decisions: 80% ought to be invested in research institutions that have attained critical mass in order to build scale and 20% should be invested to seed new research institutions with the recognition that there is a decade long gestation before any green shoots of excellence begin to sprout.

The central government needs to encourage states to create Centres of Excellence in select areas such as biotechnology, nanotechnology, material science, bio-medical devices, etc. The aim should be to develop a self-sustaining system with provisions for enabling a robust innovation ecosystem. It should include academic institutions, incubators and accelerators as well as supporting infrastructure for research, training, testing, accreditation, etc.

Provide fiscal incentives

Fiscal incentives, such as the tax credits and enhanced tax deductions, are key to nurturing innovation as they allow research-oriented organisations to effectively leverage their R&D prowess for creating valuable intellectual property.

The uncertainty associated with the outcome of R&D makes it a challenging task, especially where investments are high and anticipated return is low. Investments in R&D are known to deliver long-term returns, especially in highly regulated sectors such as Biotechnology. Keeping the above in mind, the Indian government’s proposal to reduce R&D tax breaks, specifically the weighted deduction for expenditure incurred on R&D, needs to be reconsidered.

Since 2010–11, India has been providing a weighted tax deduction of 200% for any capital and revenue expenditure incurred on in-house R&D by a company. This will be progressively reduced to 150% FY2017–18 onwards and to 100% FY2020-21 onwards.54

The government’s attempt to simplify corporate taxation in the country while welcome, should not end up sacrificing those fiscal concessions that have fostered innovation, attracted investments, generated employment and boosted India’s intellectual capital.

Globally, tax incentives have encouraged a culture of innovation. Singapore, Ireland and Israel offer R&D-related tax sops in addition to low corporate tax rates. In Singapore, which charges 17% corporate tax, companies can claim as much as 400% of the expenditure incurred on R&D as tax deduction. Ireland offers 25% tax deduction on R&D expenses over and above its low corporate tax rate of 12.5%. In Israel, MNCs are eligible to pay corporate tax of just 6-8% if they invest a minimum of NIS100 million in R&D projects and hire at least 250 new employees. Israel also offers between 50% and 60% tax deduction on approved R&D expenses. China and Russia offer similar levels of R&D-related tax breaks as India, but charge lower corporate tax at 25% and 20%, respectively, versus India’s 30%. 55

If we want India to compete with such countries, we also need to create an enabling ecosystem. India has the potential to be the innovation destination of repute if supported by special fiscal incentives given by the government to encourage innovation in the country.

With a view to foster the necessary research-led business activity, several European countries have adopted a “Patent Box” regime, wherein a lower tax rate is applicable to a separate box of income derived from intellectual property or patents. India has introduced its version of this tax incentive from the current financial year (started 1 April 2016) onwards, wherein a concessional tax rate of 10% will be charged on royalty income earned from the exploitation of a patent developed in the country.56

There is also good news in the form of the recent legislative developments in India, which have brightened the chances of implementation of the Goods and Services Tax (GST). The GST will significantly facilitate ease of doing business in the country by simplifying India’s indirect tax regime. It will replace at least 17 federal and state taxes with a single, uniform tax, thus eliminating the inefficiencies created by a multiplicity of taxes, cascading effect of taxation and complex filing requirements.

Improve access to capital

To foster venture capital and private equity as a source of risk capital for entrepreneurs and innovation, the Indian capital markets regulator Securities and Exchange Board of India (SEBI) had in 1996 enacted regulations for Venture Capital Funds. This was later replaced with regulations for Alternative Investment Funds in 2012. Alternative investment funds (AIFs), which pool in funds from high networth investors, provide a transparent and easier route for private equity (PE) funds, venture capitalists and high networth individuals (HNIs) to invest primarily in unlisted securities and start-ups.

Further liberalisation of the norms related to AIFs can help increase access of capital to start-ups. In a welcome step, SEBI is said to be working on that; the AIF route has made investments in start-ups more transparent and easier for private equity (PE) funds, venture capitalists and HNIs.

Sovereign wealth funds can also provide sources of innovation financing and countries such as Russia, China, UAE, Saudi Arabia and Singapore are doing just that57 for example, Abu Dhabi’s sovereign wealth fund has launched a USD 100 billion technology fund, part of which has been invested in creating Global Foundries, one of the world’s largest contract manufacturers of semiconductors that supplies to companies such as Apple and Qualcomm.

Crowdfunding as a concept for raising funds is also slowly gaining popularity in India. Crowdfunding platforms are allowing many early-stage start-ups and SMEs to raise funds from multiple small-time investors. While India is yet to unveil a formal regulatory framework for crowdfunding platforms, SEBI is working on norms that could allow businesses to offer equity in exchange for financial support on crowdfunding platforms. While regulations should be articulated to bring in accountability and check fraud, they should not be very restrictive.

Ease capital market rules

Revenue-less, innovative companies in India need access to an alternative source of equity funding via capital markets, similar to NASDAQ in the US and Alternate Investment Market (AIM) in the UK. By allowing start-ups to list, capital markets will give exit options to venture capital and private equity, which provide the initial risk capital for financing entrepreneurial businesses. In providing alternative avenues of exit, capital markets can play a big role in pushing the innovation agenda in India.

In 2015, SEBI allowed technology-intensive start-ups to list and raise capital from domestic stock exchanges through the Institutional Trading Platform. The restrictive norms laid down by SEBI, however, failed to attract start-ups to list. It is heartening to note that SEBI has recently moved to ease the rules for listing of start-ups.58

Ensure faster approvals

The need of the hour is not more regulation but smarter regulation. The government needs to focus on a number of regulatory reforms that will address the ease of doing business, reduce transaction costs and expedite approval timelines. A time-bound approvals system can help fast-track projects, businesses and start-ups, thus improving the business climate in the country.

India needs to reimagine the role of the regulator to a more dynamic one where “the regulator is equally focussed on potential innovations in its sector.” The relationship between the regulator and the regulated should essentially move from one of industry dos and don’ts to cooperation for the purpose of exploring path-breaking solutions.59

Establish strong industry–academia linkages

Entrepreneurial scientists are crucial components in the march towards scientific superiority, as is evident from the success of the U.S. as a leading scientific power. Equally important is the forging of academic cooperation in research and teaching programmes between institutions of higher learning and national laboratories.

The government should encourage our wide network of universities, institutions and research organisations to undertake collaborative programmes and share key findings among themselves. Academic institutions must also be encouraged to set up incubators and accelerators preferably in partnership with business schools.

Academic institutions should lay emphasis on practical training to students in industrially relevant areas, including data analysis, business management skills as well as development of communication skills.

We urgently require greater investment in science education and a modernisation of the curriculum. Students should be encouraged to study pure basic sciences.

Funding is a critical factor that can decide the course of science. Better allocation of resources can improve the quality of science education in our schools, colleges and universities. This can be effected through superior infrastructure, laboratory equipment, and teaching material.

Create virtuous financial cycle

India also needs to unleash the huge potential of its entrepreneurial energy by creating a virtuous cycle of invention and innovation that takes ideas to the market.

A virtuous cycle that involves three critical components: Academia – that discovers and invents new knowledge, new ideas, or new concepts; Entrepreneurs – who develop these ideas and concepts into “proof of concept” and; Industry – that innovates these ideas and concepts into commercial products and technologies.

All three components need to be symbiotic to succeed and this cycle needs to follow a fiscal model that makes it self-perpetuating.

Academia needs public funding to pursue discovery and invention. Entrepreneurs need a combination of public and private funding to provide the critical risk and seed capital to translate concepts into “proof of concept”. Industry uses private funding from financial institutions, venture funds and capital markets to innovate and commercialise.

However, a virtuous financial cycle can only be sustained if there is monetisation at every stage. Academia therefore needs to create intellectual property through its discoveries and inventions that can be licensed to either entrepreneurs or directly to industry with royalty payments upon commercialisation. Entrepreneurs need to create value-added IP that can be licensed to industry with royalties upon commercialisation. Industry needs to monetise through successful commercialisation that enables the payment of royalties. This complete financial ecosystem will indeed set the wheels of this “financial cycle” spinning.

The Indian government has launched the National Biopharma Mission, in June 2017, which promises to accelerate translation of research concepts into viable products, support clinical validation of pharma products, enable sustainable networks for collaboration between industry and academia, and support a robust entrepreneurial ecosystem that breeds innovation.

Encourage patenting

A robust innovation ecosystem needs the articulation of an explicit intellectual property strategy that enables start-ups to gain competitive advantage in the marketplace. Through IP, start-ups can protect breakthrough innovations, seek additional revenue stream through licensing, build credibility and attract potential investors thus paving the way for long-term value creation. Intellectual property also enables product positioning, lifecycle management as well as asset monetisation and valuation. Above all, IP is a key value driver for any organisation.

India has recently announced a new IP policy, which seeks to speed up the online registration of patents and trademarks and also aims to spread awareness among public about trademarks, copyrights and patents to promote innovation within the country.

India has also introduced a fast-track facility to process applications by start-ups that file patents for new innovations first in India. This special window is expected to drastically reduce the time taken to process patent applications.60

Leveraging big data for innovative healthcare delivery

Several studies have shown that strategic investment in health systems and the ability to innovate and adapt to resource limitations are among the key attributes that have helped some countries or regions achieve substantially better health outcomes than others at similar levels of development. It is in this context that the adoption of Information and Communication Technologies (ICTs) can provide policymakers in India with a very effective tool for improving healthcare delivery. E-health initiatives can help transform the public healthcare scenario in India, particularly in rural and remote areas.

Improving access to healthcare services in developing countries through ICTs has been receiving particular attention since the first World Telecommunication Development Conference (WTDC) in 1994. The World Health Assembly, the decision-making body of the WHO, had in 2005 recognised E-health as “the cost-effective and secure use of ICTs in support of health and health-related fields.” The WHO had then urged member states to consider drawing up long-term strategic plans for developing and implementing E-health services and infrastructure in their health sectors.

The success of E-health programmes hinges on using technology to put in place a robust IT-enabled model aimed at providing access to quality healthcare to all socioeconomic strata of the society by reaching out to the most remote locations.

Utilising the power of ICT and medical technology in the public healthcare sector can help augment all government resources to create a more transparent, efficient, accountable and effective healthcare system.

Biocon Foundation, the CSR arm of Biocon, extensively leveraged ICT to develop a unique e-healthcare model in 2015 to bring healthcare services to the doorsteps of those who need them the most. The Foundation designed the eLAJ Smart Clinics to strengthen primary healthcare delivery in India by converting Primary Health Centers (PHCs) into a comprehensive single-point treatment centre with systematic documentation of patient data.

eLAJ clinics are technology-enabled, smart clinics equipped with multiparameter monitoring device, which enables multiple diagnostic tests and generation of Electronic Medical Records (EMRs) of patients. The eLAJ model has been designed to deliver data-based healthcare on the basis of socio-demographic and health indicators obtained from community-based screenings. This innovative health delivery model is facilitating effective preventive and primary healthcare intervention in the rural areas of Karnataka and Rajasthan for the benefit of communities with poor access to quality healthcare.

One big challenge of using Big Data is the lack of standardisation of healthcare data, which is currently being generated and collected by a multitude of agents and in many different forms — from insurance claims to physician notes within the medical record, images from patient scans, conversations about health in social media, and information from wearables and other monitoring devices. The data-collecting community is equally heterogeneous, making the extraction and integration a real challenge. Providers, payers, employers, disease-management companies, wellness facilities and programmes, personalised-genetic-testing companies, social media, and patients themselves collect data. Integration of data will require collaboration and leadership from the public and private sectors.61

India needs to implement a modern ICT-based healthcare delivery model to address the demand–supply gaps in terms of doctors and health facilities. The e-healthcare programme will have to focus on leveraging modern diagnostics in primary healthcare for early detection and treatment, while using telemedicine to bridge the deficit of specialists at the primary care level. Finally, the programme should provide for cloud-based data collection to collate epidemiological and patient-centric data to profile and map the disease burden at district level. I truly believe that technology can solve many of the daunting challenges of poverty and primitive living standards that we face as a country.

As the success of public health initiatives in developing countries such as India often hinges on market access and product affordability, the government should encourage MNC pharma companies to follow a tiered-pricing model. Such a model allows drug prices to be correlated to the purchasing power parity across least developed and low income countries. For example, Gilead has granted licenses to a number of Indian drugmakers to produce generic versions of its blockbuster Hepatitis C treatment Sovaldi, which will make the drug available to Indian patients at just 1% of the medicine’s $1,000 per pill U.S. sticker price.62

Conclusion

Technology is unleashing innovation through entrepreneurial zeal across the world like never before. No longer is value creation linked to scale but to the power of the idea.

In India, favourable demographics, availability of resource at economical rates and enabling technologies such as mobile Internet, social media, cloud computing and big data are creating a fertile basis for innovation.

As some of the best ideas are born in the face of immense diversity, India’s daunting challenges throw up unlimited opportunities to innovate and create business solutions. Affordable innovation, which presents ways to innovate, be flexible, and do more with less, can lead to breakthrough growth in a complex and resource-scarce world.

We must leverage the marvels of science to generate an “ideas economy” to solve our myriad problems. There must be a virtuous cycle of basic and applied science that straddles academic and industrial research if we are to drive world class innovation. If we as a country and we as corporates under invest in science and technology, we do so at our peril. I do hope that in the years ahead, science and technology are recognised as priority areas for investment in our national agenda for economic development. After all, every part of economic development is derived from something that originated in a scientific crucible.

At the same time, I believe that innovation should go hand-in-hand with affordability – it is only when the benefits of research reaches the person on the lowest rung of the economic ladder that it can be considered as delivering true value.

India thus needs to invest in affordable innovation and embrace entrepreneurship as an economic model of growth. By backing innovative start-ups, we wish to create an “ideas economy” that generates perpetual value accretion and thereby economic and employment growth.

Peer-review under responsibility of Indian Institute of Management Bangalore.
Corresponding author:, Telephone No. : +91 80 2808 2004

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