Akhil Ravi, CEO, Aurigene Pharmaceutical Services Limited
Akhil, an IIT Bombay alumnus, has also completed his MBA in Entrepreneurship from the Indian School of Business. He has a successful 18-year career, during which he has been associated with numerous companies such as Dr. Reddy’s Laboratories, McKinsey & Company, ITC, before joining Aurigene in 2022. He also incepted a fitness development startup focused on school children promoting physical fitness and wellbeing among school children named IndiaKhelo in 2009.
There has been a lot of focus lately on outcome-based pricing. Thus, many pharma companies globally work directly with healthcare providers and patients to efficiently track outcomes and decide on pricing. In the focus are especially newer therapies, which are priced exorbitantly. In my industry experience so far, I have observed that the processes in the pharma sector are very slow compared to almost every other industry due to the criticality of getting each data right.
However, over the last 2-3 years, the period for each process in pharma has been reduced considerably, be it the time to discover a new drug, do clinical trials, get necessary approvals, manufacture, or adopt new processes - which has been a huge benefit for the patients especially post the pandemic. In light of this, most pharma companies are digitizing their processes to become more agile, demanding much faster R&D timelines, and integrating technologies such as AI, IoT, or blockchain into their manufacturing process to enable data-driven decisions.
Additionally, companies have entirely changed how they look at their supply chains. Before the pandemic, procurement was mainly focused on getting the product at the lowest cost possible without compromising quality. But today, companies have realized the value of supply chain resilience compared to supply chain optimization in terms of price and timelines.
As a result, we are seeing an increasing number of companies identify different supply chain sources to effectively de-risk their source. The key outcomes of this have been localized manufacturing, identifying at least two sources of manufacturing, coming up with multiple ways to provide the same service, and many others, which have largely benefited the pharma industry. Thus, I firmly believe that if we continue making investments in the right areas, the Indian ecosystem will no doubt benefit immensely.
In a 2023 report published by Deloitte, the average investment and time that is required to get a new medicine into the market is around $2.3 billion, taking 10-15 years. This figure includes the average cost of developing a candidate from discovery through clinical trials until it is available for patients. In my experience, I have seen that digital native companies can identify patient needs and get the drug into the market much faster than the rest of the companies.
As a result, many large pharma organizations are now partnering with these companies to accelerate their clinical trials. Secondly, adopting AI/ML has enabled organizations to make data-driven decisions and accelerated their drug development process, from the ideation phase to getting the molecule into the clinic.
Furthermore, with the recent advent of Generative AI, we are seeing an increased adoption of Gen AI models in the drug discovery process. In terms of product supply into the market, a key challenge especially in emerging markets has been counterfeit drugs. Despite not being validated yet, blockchain is a strongly emerging technology has the potential to address this problem.
As per the Association of Accessible Medicines (AAM) report, the US healthcare system saved $408 billion from using generic and biosimilar drugs during 2022, a huge jump from the $195 billion in savings accumulated in 2013, enabling patients to gain access to these drugs at affordable rates. While these are all older patent medicines, the newer therapies comprise completely new modalities consisting of sarin gene therapies and advanced biologics, which are relatively new technologies in the market.
Also, an Indian company recently got the first approval for sarin gene therapy in India and has lowered the price to a great extent now. I foresee that the sarin gene therapy products that are available for Rs. 10-15 crore today can be made available for just a few lakhs, enabling more patients to gain affordable access to those innovative therapies.
Additionally, the government has invested a lot in policies enabling pharma companies to manufacture locally. This has benefited the Indian generic companies greatly because many complex products that were earlier only manufactured in other countries and had to be imported are now being manufactured locally. As a result, companies can now work with regional CDMOs to get full access to those products, control the supply chain, cut operational costs, and then pass on this cost benefit to patients.
ESG has become very important not only at the investor level; it is now trickling down to the board and further across the industry. As a result, most of the well-established companies are already taking the necessary steps to contribute towards environmental sustainability, and there is no doubt that smaller companies will adopt too. Today, many pharma companies monitor energy and water consumption in their annual or sustainability report.
Also, a lot of companies have articulated specific goals in line with frameworks such as SBTI (Science-Based Target Initiative) to theoretically tell their objectives in terms of environmental sustainability.
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