Viral vaccines, vector platforms may become new growth areas: DRL chief

In a Q&A, the chairman of Dr Reddy's Laboratories dwells, among other things, on the draft R&D policy and the first-ever Global Innovation Summit of the pharma sector held last November

Living with the pandemic for two years has caused strategic shifts in business models that are here to stay. In an emailed interview with Sohini Das, chairman of Hyderabad based Dr Reddy’s Laboratories Satish Reddy outlines how the pharma industry came together globally to produce essential Covid-19 drugs, vaccines, sanitisers and other items. Moreover, ahead of the Union Budget, the industry has already made representations for creating a policy environment to encourage innovation. Edited excerpts:

The pandemic has caused significant shifts in the dynamics of the pharma industry. Your comments.

I think that after two years of living with the pandemic, these are some very important points to reflect on. And all the points that you mention – shifts in focus areas, agility in R&D and supply, and collaborations – I see them as interconnected. Our way of working as an industry, for instance, has become far more collaborative. At the start of the pandemic, for almost two months, there were daily calls between industry leaders.

I would like to speak from our own experience at Dr Reddy’s. When the pandemic started, vaccines and anti-virals or even sanitisers were not core to our business model and therapy choices. We went from that position to successfully being able to offer treatment options for the entire spectrum of Covid-19 indications—vaccine, mild, moderate, severe and more—in quick time. To achieve this, several components had to come together well.

Next, we had to progress towards creating or facilitating those required capabilities very quickly. In some areas, we invested in developing capabilities in-house. For many others, we opted for a model based on partnerships because we realised that this approach would best serve the urgent healthcare needs of the day.

You ventured into new areas like antivirals. Will there be a strategic shift in your business model?

Apart from venturing into antivirals and other spaces during the pandemic as Covid therapeutics that I mentioned earlier, with regard to long horizon shifts in focus areas, yes definitely our experiences during the pandemic may very well lead us to explore some long-term business shifts. For example, we have said earlier that based on our learnings from the Sputnik V vaccine, we may consider the viral vaccines and viral vector platforms space as a new investment and growth area in the long term.

What kind of changes or reforms does the Industry want at the policy level?

Yes, like I was saying earlier, we have had the opportunity to meet with the highest levels of the Government of India during the last two years of the pandemic, particularly as part of efforts by the Indian Pharmaceutical Alliance (IPA). Apart from taking stock of COVID therapeutics in the pandemic, we have also had opportunities to make representations on policy matters.

I think innovation in R&D is a big focus area for us as a company and indeed the pharma industry in India. Innovation needs long-term vision, planning and investment in capabilities and talent. It also needs to factor in the cost of risk, long gestation periods and even the cost of failure. So some of our most passionate policy representations to the Government have centred on creating an enabling ecosystem for innovative R&D in pharma.

What kind of representations have you made to the Centre?

Funding for R&D would be one of the biggest components of such an ecosystem. Here, along with the pharma industry, I think key players would be the Government obviously, and also regulators, academic institutions, start-up and tech entrepreneurs, as well as private funding from venture capitalists or private equity. Policy incentives such as restoration of weighted deduction in R&D expenditure, expansion of the scope of the patent box, special innovation funds, and other measures would be important.

Besides funding, clear policies to support and spur innovation; a regulatory landscape that offers clear timelines, accountabilities and support to clinical trials in India; industry-academia collaboration; cultivating the right talent and skills; and creation of innovation hubs would be other components of such an enabling ecosystem.

What is your opinion on the draft R&D policy?

I do want to highlight two developments that I thought were steps in the right direction. One is the draft R&D policy that is currently under consideration. The policy appears to be inclusive and comprehensive, and also mindful of realistic requirements of innovative R&D. The other is the first-ever Global Innovation Summit of the pharma industry held in November 2021 and inaugurated by the Prime Minister of India himself. The Summit saw participation from the Government, industry and other stakeholders and lively discussions on all of the above matters. Our close consultation and meetings with the Government continues, and the industry will look forward to implementation and progress on these issues whilst playing its part in making quality innovative medicines available to patients in need.