India has found that amazing drug! Nobody would have expected this. India thrived on "process-patented" drugs since 1970 because of the Patents Act, which supported and legitimized re-engineered drugs. In a way, since 1970, most Indian pharma companies had out-sourced the research and development activity to other countries. It was a very different kind of out-sourcing arrangement: no contracts, no payments, no obligations, and no rights – not even Intellectual Property Rights (IPRs). Riding on someone else's waves, and feeding on other's kill, some of the Indian pharma companies had become complacent and laid-back. It was as if they had been inflicted with a disease. They needed a 'drug' that could change their thinking and mobilize their creative juices. India had always lagged behind in drug discovery and research. In the global analysts' mind, India was not regarded as a country that can lead the pharma industry from the front. But, that was then, and this is now.

GIVE OR TAKE A BILLION!

Pharma companies globally are investing heavily in research and development (R&D) to develop new drugs that will cure deadly diseases. Though the cost of developing a new drug has soared over the years from $100 million in the 1980s to more than $800 million now, the investment in pharma-related R&D is now higher than ever. According to industry analysts at Goldman Sachs, the total global R&D spending in 2004 had reached $50 billion. Says Clifford C Kalb, Senior Director of Strategic Business at Merck, "The key to sustainable growth is innovation. If we develop breakthrough drugs and focus on the patient, the profits will follow."¹

US, which is the world's largest spender on pharma R&D and a global leader in drug discovery, has steadily increased its pharma R&D budget from $2 billion in 1980 to more than $38 billion in 2004. For every dollar spent on health, US spends about 6 cents on research. According to a report by Pharmaceutical Research and Manufacturers of America (PhRMA), the US biotech and bio-pharma investment in R&D went up 12.6% from $34.5 billion in 2003 to $38.8 billion in 2004. This increase in pharma R&D investment in 2004 is about five times higher than that in 1990. Out of the $38.8 billion, PhRMA member organizations invested about $30.6 billion in R&D within the US, while about $8.2 billion was invested in R&D outside US. Moreover, PhRMA member organizations invested about 18.8% of their 2004 domestic sales on R&D within the US. The increased spending on pharma R&D has resulted in the US Food and Drug Administration (USFDA) approving more than 363 new drugs, bio-medicines and vaccines between 1993 and 2003 for the prevention and cure of about 150 various diseases. The bio-pharma has, of late, become the most research-intensive of all industries in the US.

Europe is second in the world in pharma R&D spending. Between 1997 and 2002, about 787 foreign investment projects were undertaken in the European bioscience industry. Among European countries, UK and France received the highest number of foreign investment projects in life sciences, while countries like Ireland, Germany, Belgium, and Spain follow closely.

The study by PhRMA also revealed that pharma is a highly R&D-intensive sector in the US and UK. Moreover, UK has 7% more 'R&D rigorous' organizations (i.e. organizations that spend 4% of their sales on R&D and more than ₤1 million) in 2005 (116) compared to 108 in 2004 and 88 in 2001.

It is estimated that the global pharma sector spent about $1.25 billion on R&D for each New Molecular Entity (NME) application approved by the USFDA in 2004, which is four-fold the R&D spending of each NME submission in 1995 (i.e. $317 million). Also, the global pharma R&D spending per worldwide New Active Substance (NAS) launch touched a new high of $2.3 billion in 2004, an increase of 43% over the previous year. Among R&D investments in various sectors,