THE URGE TO GO LARGE

Biotech drugs are the future. One in every three new drugs approved in the global market is a biotech drug. This, by itself, makes it an obvious space to be in, but for Indian companies, there are other compelling reasons, too. Their traditional stronghold of generic synthetic or small molecule drugs is under siege globally due to low bargaining power, pressure on margins and increased competition, especially in the crucial US market. Biotech drugs can be their next growth engine, especially as drugs with markets worth millions of dollars go off-patent in the next few years, opening immense opportunities for the launch of biosimilar versions of these original biotech drugs. The big Indian pharma players, the prominent among them being biopharmaceutical maker Biocon, are doing exactly that – chasing this opportunity in biosimilars that is estimated to be worth $5 billion globally and $1 billion in India.

However, the space is not for the faint-hearted, not just because developing a biosimilar is costlier than making a generic version of a chemical drug, but also because the market is increasingly getting tough globally. Developing a biosimilar costs around $100 million, while with generics, it is possible to file 20 “abbreviated new drug applications” for the same amount. “These are expensive investments but Indian pharma will have to make them,” says Kiran Mazumdar-Shaw, Founder, Chairperson and Managing Director of Biocon. “We invest about 15 per cent of our revenue in research.