Eli Lilly, a leading American pharmaceutical company, has stepped up its exposure in India.
The company is entering into "risk and reward sharing arrangements" with Indian drug makers which are rapidly converting from a generic model to one based on research and development.
"I think it is the first time that Indian companies are getting access to drugs from large pharmaceutical companies and developing them on their own up to a certain stage," said Sidney Taurel, chairman and chief executive officer of Eli Lilly. "If they get all the way to phase III, we will get involved in global trials and so forth."
"The adoption of the patent protection agreement for pharmaceuticals in India is a welcome development," he told Business Standard in an exclusive interview. Lilly would focus on India primarily as a "source" for "talent" and "research capabilities," he said.
"Lilly has entered into risk-sharing and reward-sharing agreements with several companies such as Nicholas Piramal India, Jubilant Biosys and Suven Pharmaceuticals. These agreements make available one or several of our compounds in a very early stage of development," Taurel said.
Under this arrangement, the companies with their own financial and human resources will have to bring forward compounds made available by Lilly. This stage is called the clinical development.
"Essentially, it would involve further development and would require eight to nine years for the drugs developed from compounds to hit the market."
Eventually, if the drug makes it to the market after all regulatory approvals, Lilly would pay the companies "royalty" on its global sales. "We are seeing convergence of (Indian pharmaceutical) companies into a model that has been witnessed in the high-technology industry."
Despite the recent setback to Novartis over the patent approval for cancer drug Glivec, Torrel says, "India sees in its best interest to move in the value chain that is more knowledge-based and has more intellectual protection."
"Yes, sometimes we get the impression that India moves one-and-half steps forward and one step backward. However, when compared with China, we are more encouraged by the judiciary system in India. We believe enforcement would improve from what we see today," he observed.
Lilly has a strong presence in four therapeutic areas: neuroscience, endocrine disorders, cancer, and cardiovascular diseases.
At a time when major research-based pharmaceutical companies are facing a severe drought in terms of developing new medicines that can claim patent protection, Torrel says his company has succeeded in "bucking that trend" and is now ready to launch 12 to 14 new products by 2010.
With a turnover well over $30 billion last year, the company is confident that it will not experience the same problems like its counterparts.
Expressing concern that "a lot more needs to be done" to tackle multi-drug resistant tuberculosis in India, he said the company has transferred proprietary technology to Shasun Chemicals and Drugs for manufacturing of Lilly's Cyclosporine.
India will serve Lilly on two important fronts - access to good minds and clinical trials. "We do around 40% of our IT work from India and the percentage will only increase. In the coming years, we would focus more on clinical trials for diabetes," Torrel argued.