India's service-oriented scheme for attracting clinical research risks making the country a servant to major drug firms, instead of striving for a greater portion of revenues through collaboration. Credit: Newscom/Chad J. Shaffer

An agreement in principle to enable the smooth transfer of microorganisms and biological materials from the US to India is an encouraging sign for Indian bioscience. But slow implementation of the country's broader biotech goals, including India's grandiose scheme to become the global hub of contract research and clinical trials, may threaten its goal of becoming e a major player.

Discussions in mid-June between acting US deputy secretary of commerce David A. Sampson and an Indian delegation led by science minister Kapil Sibal led to the biologics transfer proposal. Under the plan, India's Department of Biotechnology (DBT) would procure biological materials from the American Type Tissue Collection (ATCC) and warrant against their misuse or subsequent acquisition by bioterrorists, with safeguards and export controls similar to those around nuclear technology. “We are in the process of resolving this important issue,” declares DBT secretary Maharaj Kishan Bhan.

Although ATCC says its regulations for export and distribution of infectious agents did not change after 9/11 and that Indian scientists have full access to the public database, researchers claim problems working with the US-based repository. “ATCC is usually prompt, but if you ask for a type strain or a reference strain, they do not even respond,” says a senior scientist at the Institute for Microbial Technology in Chandigarh, which operates the Microbial Type Culture Collection, MTCC, India's only such repository.

“I know of a case when a government lab in Kolkata [Calcutta] doing research on cholera could not get a strain of cholera bacillus from ATCC,” notes Raghav Saha of the Department of Science and Technology. “The problem is really acute for vaccine developers,” concludes Krishna Ella, managing director of Hyderabad-based Bharat Biotech and chairman of the biotech committee of the Federation of Indian Chambers of Commerce and Industry (FICCI). The hitch has delayed Ella's own project on hepatitis-E vaccine.

Easier access to ATCC would be a great relief but Ella, who was also a member of the delegation that met with the US's Sampson, argues that the Indian biogenerics industry still faces the problem of having to pay exorbitant prices for vectors, yeast, bacteria, viruses and expression systems needed for copying drugs whose patents will expire soon.

By putting emphasis on services instead of innovation to become competitive, India's Department of Biotechnology's policy is likely to spawn “clones of companies doing contract research, clinical trials and validation studies for multinationals” Srinivasan Visalakshi, National Institute of Science Technology and Development Studies in New Delhi

Industry scientists admit that they cannot document the source of many of the basic tools for making vaccines and drugs, a potential basis for challenging biogenerics patents. One solution, says FICCI, is to create a global bank that will compulsorily collect patent-protected biological materials and offer these to industries at a nominal cost, clearly establishing ownership.

Even if such a system becomes established—which is doubtful—India must still address issues of quality and regulations, analysts say. The heavy expense of gaining regulatory approval in biogenerics and the spending needed to reassure doctors about product safety remain barriers. “Not many Indian companies have the resources to cross these hurdles,” says Prasantha Ghosh, head of biotech at Cadila Pharmaceuticals in Ahmedabad.

While the generics producers are testing the waters in regulated markets, India must still create monitoring mechanisms and develop adequate clinical practice standards to attract outsourced clinical trials. Government reluctance to grant exclusivity of clinical trial data may also scare away companies, analysts say. And even if implemented successfully, the $2.5-billion-per-year business model—ironically built on high disease prevalence and a billion-plus, genetically diverse and economically weak population—has its critics.

By putting emphasis on services instead of innovation to become competitive, DBT's biotechnology development strategy is likely to spawn “clones of companies doing contract research, clinical trials and validation studies for multinationals [MNCs],” says Srinivasan Visalakshi, an industry analyst at the National Institute of Science and Technology Studies in New Delhi. She foresees an army of biotech “coolies” laboring alongside the ones doing computer programming for their masters in California's Silicon Valley. Instead, suggests Samir Brahmachari, director of the Institute of Genomics and Integrative Biology in New Delhi, India could create a substantial fund for buying intellectual property rights from small and medium enterprises around the world and turn them into higher value products in collaboration with MNCs.

Visalakshi's study of 229 Indian biotech companies concludes that 20 years after setting up DBT, India still has no clear definition of biotech. “Everything from fermentation to aquaculture and sericulture to bio-fertilizer is clubbed under biotech, resulting in subcritical funding,” she told Nature Biotechnology. Visalakshi also finds the preproduction stage to be the weakest link in the commercialization of biotech in India as venture capitalists “shy away from risk, and lack understanding or capability to assess biotech projects.” The conclusion of a recent study “Dynamics of Biotechnology Research and Industry in India” by the Organization for Economic Cooperation and Development in Paris is similar. India needs “to set priorities in the R&D work program,” it says, and should “urgently address problems arising out of a large number of agencies dealing with biotech, which has led to duplication of research funding and a lack of coordination.”