Big Pharmaceutical Companies Rely on India, China for R&D

The IndUS Business Journal reports on the Ewing Marion Kauffman Foundation’s study, “The Globalization of Innovation: Pharmaceuticals – Can India and China Cure the Global Pharmaceutical Market?

…Indian and Chinese scientists are rapidly developing the ability to innovate and create their own intellectual property as a result of Western companies shifting their research and development operations to the two countries. In fact, several non-Indian firms with business units in India and China are performing advanced discovery and have begun to move into the “highest-value segments of the pharmaceutical global value chain,” according to the study.

“Globalization is happening faster than people think. Having India and China conduct such sophisticated research and participate in drug discovery was unimaginable even five years ago,” report author Vivek Wadhwa, an executive in residence and adjunct professor Duke University’s Pratt School of Engineering, and a fellow at the Labor and Worklife Program of Harvard Law School, said in a statement. “The challenge is for America to understand this trend and realize the potential of globalization”…But, it is too early to tell if India and China will eventually rival the United States as important sources of novel drugs, and not just as the world’s top producers of generic medications. Whereas high-tech sectors such as software development and electronics manufacturing have experienced tremendous growth in Asia – the former in India and the latter in China – in the pharmaceutical industry, new products take years to emerge from the research and development stage and then must still clear regulatory hurdles. According to Wadhwa, most of the new risk-sharing agreements between Western and Asian drugmakers are relatively new, dating to 2005, so it could be another decade before they produce concrete results.

See also past CDT posts on pharmaceuticals.

February 20, 2009 7:01 PM
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