The report that one of the giant pharmaceutical MNCs is examining the option of scaling down its R&D establishment in India is bound to send shock waves through the industry. The move is apparently motivated by the need to reduce costs and concentrate on R&D activities at a few specific locations throughout the world. But it also follows that, had the Indian R&D operations of the company been yielding results, establishments in other parts of the world would have been shut down, rather than the Indian one.The reason for the shock will be our long-cherished notion that R&D constitutes one of our areas of core competence.There are sound arguments for the location of an R&D base in India, especially in the pharma sector. Pharmaceuticals is a research-driven industry. It has long been our fond claim that this country has a very large-pool of brainpower, thanks to some very good scientific and technological institutions. The quality of our research in pharmaceuticals has recently been proved by the whollyindigenous development of an anti-leprosy vaccine. Several leading Indian companies have filed patents for new chemical entities discovered by them in the United States.
The advantages of India's rich scientific base are supplemented by low costs. The Central Drug Research Institute has estimated that it could develop a drug from scratch at about 30 per cent of US costs. A skilled PhD can be employed for 20 per cent of the prevailing US rate. Add to that the country's pharmaceutical industry's long history of being able to develop products under the process patent route, and its mastery of reverse engineering. India could also be a source of clinical research for use in international drug dossiers, which have to be submitted while applying for a patent. And yet these factors don't seem to count for much with some multi-national companies. One reason could be that the cream of Indian research and development talent has emigrated to the US. It may not, paradoxically, be all that valuable to be a low-costcentre. Perhaps the message is that we need to attract back Indian scientists working abroad. Some Indian companies have already taken steps in this direction. Clear policies to ensure proper infrastructure in research will also help. We need to ensure that one major area of comparative advantage, achieved at the public expense as a result of years of subsidised higher education, is not frittered away.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
