Medical Biotechnology Innovation in India

A Critical Analysis

P Omkar Nadh

• Publisher: Routledge India
• Year: 2022
• Print ISBN: 9781032466361
• eBook ISBN: 9781000592252
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Regional Studies
• Index: Politics & International Relations

This book examines the medical biotechnology industry in India through the lens of a critical political economy. It discusses the sharp trajectory of growth in the biotechnology business and the state of investments, subsidies, and patents which propelled the rise of the industry in India.

The book uses in-depth interviews and case studies to analyse the roles of various financial actors, state institutions, and academia in the medical biotechnology ecosystem. Focusing on the relationship between India's neoliberal policies and the swift growth of the industry, the author examines the merits and demerits of the current market-driven biomedical ecosystem exploring the trends in the industry, biomedical start-ups, the use of human resources, and capital accumulation process. The book reiterates and emphasises the need for the democratisation of scientific and medical work and for striking a balance between economic gains and public health priorities.

Comprehensive and insightful, this book will be of interest to scholars and researchers of science technology society studies, public health, economics, business studies, medical sociology, public policy, and political science.

Chapter 1 The Beginnings

DOI: 10.4324/9781003292104-2

In India, the introduction of neoliberal reforms started in the 1980s (Kohli, 2006), and gradually, by 1991, with complete liberalisation of markets—except for a few strategic sectors—there was a transformation of India’s political and economic spheres. With neoliberalism as a guiding principle, the state was offering large-scale incentives for private capital accumulation, weakening the public-sector units (PSU) and encouraging public-private partnerships (PPP). It was during the same period that biotechnology was also rising to prominence in India primarily because of the potential it has to offer for economic growth. As a result, what was witnessed is that, right from the beginning, the biotechnology trajectory was predicated on neoliberal economic principles, and the growth objective was formulated in such a way that it caters to the interests of a few while leaving behind the many. This chapter, by unearthing the policies, processes, and strategies, explains how the biotechnology paradigm in India, right from the beginning, was set in process by the state and its institutions with the objective of enabling the expansion of private capital using public resources.

One of the major transformations that took place with the neoliberal restructuring is the decline and reconfiguration of the PSUs. Also, with economic liberalisation, the state actively encouraged business models like the PPPs and encouraged capital accumulation by providing various incentives to the private industry. The consequence of such intervention is a higher public cost for narrow private benefits. This phenomenon is witnessed in the Indian biotech sector right from its emergence due to its convergence with the onset of neoliberalism in the country. In order to demonstrate this, case studies of seven first-generation commercial MBT endeavours consisting of one PSU, two PPPs, and four in the private sector that are first-of-their-kind initiatives in the country are discussed in this chapter. The PSU discussed is that of Bharat Immunological and Biological Corporation Limited (BIBICOL) established by the Department of Biotechnology (DBT) in 1989, which subsequently underwent several changes in its structure and business model during the period of economic reforms. This is also the first PSU established by the DBT for vaccine manufacturing to make India self-sufficient in vaccine production.

The PPP projects include the Genomed project, which was a partnership between the Institute for Genomics and Integrative Biology (IGIB) and Nicolas Primal India Limited (NPIL) established in 2002 and The Centre for Genomic Applications (TCGA), a partnership between IGIB and the Chatterjee Management Services (CMS) established in the year 2003. Genomed is a first-of-its-kind knowledge equity venture with a public-sector institution and private industry and TCGA is an establishment of necessary infrastructure and resources for enhancing biotechnology research in the country. Thereafter, case studies of four private biotech enterprises in the country that were established during the early stage of the biotech scenario and are first-of-their-kind initiatives are discussed. These firms include Biocon, Astra Research Centre India (ARCI), Shanta Biotechnics, and Strand Life Sciences (SLiSc). These case study firms illustrate the role of the state and the network of actors involved in the capital accumulation process during the emergent moment of the biotech scenario in the country.

The Beginnings of the Biotech Scenario in India

The initial impetus towards the growth of the biotech sector in India came from the state. This is exemplified by the fact that till the 1990s, there was no active involvement of the private sector in biotechnology-related activities, except for a handful of firms. A few subsidiaries of multinational firms, along with a few Indian firms with borrowed technologies from the West, were engaging in biotech activities (Kumar, 1987). As such, the initial policy engagement with biotechnology took place in India for the first time during the sixth five-year plan, which led to the establishment of the National Biotechnology Board (NBTB) under the then prime minister (PM) Indira Gandhi in the year 1982 (Chaturvedi, 2007). Around the same time in 1984, the International Union for Pure and Applied Chemistry’s (IUPAC) seventh International Biotechnology Symposium was held in New Delhi, the first time in any developing country (Ghose & Bisaria, 2000). And in 1986, the United Nations Industrial Development Organization established a component of the International Centre for Genetic Engineering and Biotechnology in New Delhi (Fan & Watanabe, 2008). The Government of India (GoI) since the 1990s has supported this sector in a large way through various incentives such as tax exemption, providing of venture capital (VC), and price control exemptions on the export of healthcare products, to list a major few (Gulifeiya & Aljunid, 2012). Before this recognition by the Indian state, microbiology even as an academic endeavour wasn’t so prominent in India. During the 1950s and ’60s, only a few research institutes were engaging in microbiology research, including the Indian Institute of Science (IISc), Bangalore; National Chemical Laboratory (NCL), Pune; and the Department of Applied Chemistry of University of Calcutta (Bhargava & Chakrabarti, 1991). It was only in 1977 that India witnessed the emergence of a full-fledged research centre entirely dedicated to research in microbiology in the form of the Centre for Cellular and Molecular Biology (CCMB) established by the Council for Scientific and Industrial Research (CSIR) with Prof. Pushpa M Bhargava as its first director (Singh, 2016). Interestingly, this was the same year that the discovery of rDNA technology took place, which later paved the way for the commercial proliferation of the biotechnology industry. Bhargava, who returned to India after working at the University of Wisconsin and National Institute of Medical Research, UK, was a strong proponent of India’s participation in the molecular biology-based scientific paradigm. He is also one of the major reasons behind the establishment of NBTB, along with the initiative of the Indian National Science Academy, CSIR, and DST (Bhargava, 2009). However, Bhargava writing in an article in Current Science, mentions that he was not happy with the establishment of NBTB. For one, what he was wishing for was a dedicated board of biotechnology that engaged in three activities—namely, research, development, and production. Secondly, though NBTB had an executive secretary, the real powers rested with the secretary of DST, and it also had very little funds. He along with a few other scientists at that time wrote to Rajiv Gandhi, then PM of India, expressing their discontent with NBTB and requested a dedicated DBT (Bhargava & Chakrabarti, 1991). Thereafter, in 1986, the DBT as an autonomous department was established with Dr. S Rama Chandran, someone who comes from an industrial background, as its first member secretary (Vijay Raghavan, 2016). Also, a Product and Industry Development (PID) division was started in DBT in 1989 to transfer the research results of government-funded institutionally developed technologies to the industry (Ghosh, 1996). India was the first country across the globe to have a separate department for biotechnology (DBT, n.d.-b). Ramachandran says, with regard to such generous sanction by the state, “Prime Minister Rajiv Gandhi recognised the pace at which biological sciences were growing globally that ‘unless we leap forward, there is a no way of catching up with rest of the world’” (ibid.). The main reason pointed out for taking the initiative in such a big way was articulated by DBT as “because many of our macro-economic issues of growth were subsumed (emphasis original) within that science’s development” (ibid.). Established with such enthusiasm, the department received sharp criticism from inside about its underperformance than expected with respect to its industrial activity. Bhargava, who was a member of its high-powered Scientific Advisory Committee (SAC), voiced a relentless criticism about the functioning of this institution for over a decade. In an article in Current Science (1991, p. 516) in response to the question, “What would have been the scenario if DBT had not been there?” he replied with “Not very different from what it is today.” Writing in another article in the Economic and Political Weekly (1995) assessing the DBT’s performance, he said,

Whatever has happened in the area of biotechnology in the country has been outside of the purview or influence of the DBT and would have happened even if the DBT was not there. In the eyes of the industry, including the fledgling biotechnology industry in the country, and the people of the country, the DBT has been a non-entity.

(Bhargava, 1995, p. 3050)

He also expressed that such lethargy with which DBT worked towards industrial co-operation would lead to ‘neo-colonialism’¹ and appealed to the government to take risks on behalf of the private sector, as he opines that the latter would not take risks in a country like ours (Bhargava & Chakrabarti, 1991). The basis for Bhargava’s criticism of DBT is that it has not performed as expected with respect to support of industrial activity in India. However, Ramachandran, the first secretary of DBT, negates this by saying that the initial focus of DBT had been in the development of capabilities and setting up of institutions (Ramachandran, 1991b). It was only a matter of time before the DBT involved itself in the activities that Bhargava was suggesting. As mentioned previously, DBT started a PID in 1989 itself, and in its 2005 draft document of National Biotechnology Development Strategy–I (NBDS-I), it encouraged PPP, recommending an allocation of 30% of its budget towards PPP activities (Jayaraman, 2005). NBDS-I, in order to develop human resources, also recommended a PPP model of PhDs named Bio-Edu-Grid, which is a network of universities and industries to facilitate the pooling of resources (DBT, 2005). This private-industry-friendly activity in the biotech sector in India coincided with the transformation of the macroeconomic policy of India into a more market-friendly one. The Science & Technology (S&T) plan during the eighth plan period calls for the aligning of S&T with the New Industrial Policy of 1991 (Planning Commission, 1992) that was championing the cause of private industry and foreign investments (Patnaik, 2016). This neoliberal transformation of the economy in turn shaped the development of the Indian biotech sector right from its emergence.

In 1990, to institutionalise the commercial linkages of academia with industry, a new entity named Biotechnology Industry Consortium Limited (BCIL) was established (Ramachandran, 1991b). The company was promoted by DBT, and its core capital of Rs. 53.7 million was provided by financial institutions, including the Industrial Development Bank of India (IDBI), Industrial Credit and Investment Corporation of India (ICICI), Industrial Finance Corporation of India (IFCI), Unit Trust of India (UTI), and contributions from the corporate sector, including Ranbaxy Pvt Ltd, Cadila Laboratories Pvt Ltd and Glaxo India Pvt Ltd (Kharbanda, 2004). Further, recently, in 2012, it established another institution—namely, Biotechnology Industry Research Assistance Council (BIRAC)—specifically to encourage PPPs and help start commercial establishments by providing capital at various stages of development. Currently, the introduction page of the newly revamped DBT website ends by saying, “The future is bright with DBT collaborating with industry in new programmes. We welcome all stakeholders to join this historical march forward!” (DBT, n.d.-b).

This evolutionary trajectory of the biotech sector in India shows that economic considerations, more specifically the goal of economic growth through the promotion of private industries, assumed the central objective of the biotech strategy of India. One can witness a clear co-production of the economy and technoscience and the development priorities of the government here. In the following section, the case of BIBICOL, the only PSU established by the DBT which is still functioning, is critically examined to explicate how it ended up serving the interests of private capital.

From Producer of Vaccines to Supplier in the Global Value Chain: Trajectories of BIBICOL

Though India has an early history of institutionalisation of vaccine production right from the colonial period, actual vaccine production in India was started by the DBT (Madhavi, 2007). India as a part of the World Health Organization’s (WHO) Alma Alta Declaration of “Health for All” introduced an Expanded Programme of Immunisation in 1978, and further intensified these efforts through the Universal Immunisation Programme in 1985 and National Technology Mission on Immunization in 1986 (ibid.). DBT was also established as a separate DBT in 1986. As part of such intensified efforts, the Ministry of Health and Family Welfare and DBT were given responsibility for the successful implementation of the immunisation project with a clear mandate to make India self-sufficient in vaccine production (Ramachandran, 1991b). DBT established two PSUs—namely, BIBICOL and Indian Vaccine Company Limited (IVCOL)—for this purpose. IVCOL was incorporated as a joint venture unit between DBT, Indian Petrochemicals Corporation Limited (IPCL), and Pasteur and Merieux Serum and Vaccines (PMSV) a PSU in France. The idea behind this partnership was that PMSV would transfer the technology required to IVCOL and IVCOL would manufacture the vaccines. IVCOL was put to a halt in 1992 because PMSV turned into a private company, and since Indian markets were liberalised by 1992, PMSV refused to transfer the technology (Madhavi, 2005). IVCOL now is non-functional, leaving BIBICOL as the only PSU established by DBT that is still functioning after being declared as a sick unit in 2000 (Madhavi, 2007). This makes BIBICOL an interesting case to pursue.

The initial capital required for the project was provided by DBT, along with several other financial institutions (Somasekhar, 2000). The main focus of BIBICOL was on formulating the oral polio vaccine (OPV) through a technology transfer agreement called “Technology Consultancy Co-Operation” with a Russian firm named Institute of Poliomyelitis and Viral Encephalitis (IPVE; Madhavi, 2007). IPVE, in exchange, promised to provide the basic know-how on the condition that India would bulk import OPV during the first phase of the agreement. This relationship of BIBICOL with IPVE formed a part of the bilateral agreement between India and Russia for long-term scientific co-operation in 1987 (Planning Commission, 1992). Within five years after its establishment, i.e. in 1994, BIBICOL went for an initial public offering (IPO) and was listed in the Bombay, Kolkata, and Delhi stock exchanges to raise the capital (BIBICOL, n.d.). By then, the global biotech scenario, especially in the US that began much earlier than in India, was entwined with the financial markets. In the Indian case, however, even today, there are hardly any biotech companies that are publicly traded. Biocon, the first private biotech firm in India established in 1977, went for an IPO only in 2004.

The story of BIBICOL has several interesting turns. Pasteur Institute of India (PII) had set up a unit for the production of OPV before BIBICOL (in 1969) with support from WHO and GoI. The vaccine technology was also imported from IPVE and the seed virus that was necessary was procured by Dr. A. B. Sabin, who originally developed OPV (Ramachandran, 2008). PII had successfully produced six batches of the vaccine and had to stop production after its seventh batch was allegedly found to be virulent (ibid.). Madhavi (2007) argues, after this incident, for nearly two decades, there were no efforts by the state to reinitiate the production after taking any corrective measures; conversely, it depended on imports deviating from the initial mandate of encouraging indigenous production. BIBICOL was the next serious initiative in the public sector for fostering indigenous production. However, BIBICOL was also not successful in developing vaccines domestically due to various reasons. The most important reason was the termination of BIBICOL’s contract with IPVE, subsequent to the objection of the United Nations Children’s Fund (UNICEF) since IPVE did not have the Good Manufacturin...

Table of contents

• Cover Page
• Half Title page
• Title Page
• Copyright Page
• Contents
• List of Illustrations
• List of Abbreviations
• Acknowledgements
• Introduction Capitalism, Neoliberalism, and Biotechnology
• Chapter 1 The Beginnings
• Chapter 2 MBT Ecosystem and Neoliberal State
• Chapter 3 Venture Capital
• Chapter 4 Indian Academia.inc
• Chapter 5 Production and Accumulation
• Conclusion
• References
• Index