COVID-19 and Pharmaceuticals: International & national collaborations will increase India's business prospects

COVID-19 has been a stark reminder of the importance of uninterrupted access to medicines and health products. The capacities and competencies of national pharmaceutical industries assume great importance in this regard.

The pharmaceutical industry’s criticality extends beyond a public health perspective. This is easily understood from comparative examples. A pioneering modern generation industry like automobiles has attracted large investments worldwide and generated significant employment. Much as the prospects of the industry are important for governments, businesses, and consumers, disruptions in automobile supply chains aren’t as worrisome for countries as those in drugs and medicine supply chains. Countries can survive delays in the delivery of cars, but not in medicines and essential health products.

Nations with inadequate local pharmaceutical capacities are at risk of not being able to provide essential health products to their people in unanticipated trying conditions such as those brought on by COVID-19. Difficulties faced by countries in this regard is evident from the huge global diversity in immunising national populations.

Till now, most countries in Africa haven’t been able to vaccinate more than 2-3 per cent of their populations on average. In South and Southeast Asia, the proportions of average vaccinated populations in most countries are below 20 per cent of their populations. High-income Asia-Pacific countries like Australia and New Zealand too have vaccinated only about a third, or less, of their populations. This is in sharp contrast to North America, and West and South Europe, where countries have vaccinated around two-thirds of their people.

Countries not making vaccines at home are having to rely on supplies from others for inoculating their populations. The World Health Organisation (WHO)’s common pool of vaccines is insufficient for meeting the global demand. The wide divergence in vaccination rates across the world, therefore, is hardly surprising.

At a time when access to vaccines for limiting the incidence of COVID-19 is one of the highest priorities for all countries, the role of global producers of vaccines has become critically important. India has an extremely important role in this respect.

Variously described as the ‘pharmacy of the world’, India has strong local proficiencies for producing finished dose formulations, biologics (e.g. vaccines) and other health care products (e.g. surgical). It is a prominent exporter of medicines and vaccines to major global markets. As the world’s eleventh largest exporter, India accounted for 2.6 per cent of global pharmaceutical exports in 2019. In the same year, it accounted for 3.9 per cent of global vaccine exports as the 7th largest vaccine exporter.

COVID-19 vaccines being manufactured and distributed by Indian pharmaceutical companies, such as the Serum Institute of India (SII), Bharat Biotech and Dr Reddy’s Laboratories, are being widely deployed by India, and several other countries, for fighting the pandemic. More local vaccines, such as by Biological E, Gennova Pharmaceuticals, and ZyCoV-D by Zydus Cadilla – a needleless vaccine administrable to children above 12 years - will be available soon for local and global use.

India’s prominence as a global supplier of vaccines has much to do with the effective foreign collaborations of its local pharmaceutical firms. The partnership between AstraZeneca and the SII for producing the Covishield vaccine is well-known. Covishield is approved by the WHO for emergency use and is being administered in several countries. The Sputnik-V vaccine, developed by Gamaleya National Research Laboratory in Russia, is being distributed in India by Dr Reddy’s Laboratories in collaboration with the Russian Infrastructure Development Fund (RIDF).

More collaborative vaccines are awaited. These include the Johnson & Johnson’s vaccine to be produced by Biological E. The vaccine will be a landmark product as it will be an outcome of the Vaccine Partnership announced by the Quad group of countries – the US, India, Japan and Australia – for manufacturing and distributing vaccines for the vast Indo-Pacific region. Biological E has also tied up with Providence Therapeutics of Canada for manufacturing the latter’s vaccine. The US vaccine producing firm Novavax has also tied up with the SII for making its vaccines in India.

The B2B (business-to-business) collaborations have been vital in augmenting India’s ability to be a leading global actor in tackling COVID-19. These collaborations assure that domestically India will not run short on vaccines. A combination of foreign financial, technological and marketing expertise with local proficiency in R&D and manufacturing is the best strategy for obtaining such security for India and several developing countries. The collaborations put India in a position of commendable strength as it serves its own people and the world.

COVID 19 has been instrumental in sparking off a fresh round of foreign collaborations for the pharmaceutical industry in India. The benefits of these collaborations are significant for India and collaborating countries that are home to firms tying up with Indian pharma. These partnerships extend beyond vaccines to treating COVID-19. Notable examples include Gilead’s voluntary licensing agreement with Indian generic manufactures for producing remdesivir, a drug being supplied to more than a hundred countries for COVID-19 patients; and MSD (Merck, Sharpe & Dohme)’s efforts to license locally production of Molnupiravir. The collaborations underscore the point that for safeguarding access to essential pharmaceutical products it is important for businesses to collaborate transnationally. No country is internally sufficient enough, in terms of availability of raw materials, essential inputs, technological competence, the scale of production, financial resources and distribution networks, to avoid these partnerships.

From a larger economic resilience and self-sufficiency perspective, the tie-ups in the pharmaceutical industry are greatly helpful in building local capacities. The COVID-19 has provided the right occasion and opportunity for India in this regard. The collaborations will ensure that India retains its pre-eminence as the world’s leading producer of vaccines. They will also provide the foundation for the Indian pharmaceutical industry to be the frontrunner in making drugs for future treatment of COVID-19.

Public health security, in addition to being a global concern, is of paramount national interest for all countries. The fact that India and its major geopolitical allies – the US, Japan, UK, Australia, Canada – have decided to work together for expanding the global supply of health products is an indication of the strategic significance of the pharmaceutical industry. With the world’s largest democracies collaborating on combatting the COVID-19 pandemic, pharmaceuticals, undoubtedly, will be the launchpad for broader international partnerships between countries.

COVID-19 has put India in an exceptionally favourable position for engaging in pharmaceutical collaborations that facilitate greater global associations. With the best in global pharma ready to collaborate with India, India must seize the opportunity. This can be India’s moment for making a decisive impact on global health security.

The author is Senior Research Fellow and Research Lead (trade and economics) at the Institute of South Asian Studies at the National University of Singapore.

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