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Innovation that includes

The pharmaceutical industry needs to shed its archaic blockbuster model.

Written by Shamnad Basheer |
April 26, 2014 12:20:59 am
A quick perusal of the informal economy demonstrates that creativity is not the preserve of the rich.

The pharmaceutical industry needs to shed its archaic blockbuster model.

A number of years ago, I was keen on starting an intellectual property (IP) and innovation institute. As I was thinking through prospective names for it, I came across a wonderful sentiment from one of India’s leading scientists, R.A. Mashelkar, that innovation is really a journey from Saraswati (the goddess of knowledge) to Lakshmi (the goddess of wealth). This struck a chord with me and I coined the name “Sarakshmi” — from Saraswati to Lakshmi.

When I suggested this to my then supervisor, David Vaver, he exclaimed that generating wealth is great, but who gets it? Will it be concentrated? What about distributional concerns? I brushed these questions off, stating that wealth has to be created before it can be distributed.

But when I thought about it further, I wondered, does this necessarily have to be a sequential process or can we foster a model where growth is inclusive and embraces distributional concerns within its main architecture?

The term “inclusive growth” attempts to capture this sentiment. In much the same vein, we now have the concept of “inclusive innovation”.

At base, the notion of “inclusiveness” has two key aspects to it. First, the fruits of innovation must be accessible to the public at large and not confined to a privileged few. Particularly in the case of drugs, which are often priced out of the reach of the average consumer —  consider Nexavar, a patented kidney cancer drug that sold for Rs 3 lakh for a month’s dosage. Fortunately, the Indian patent office granted a licence to ensure that a more affordable version, priced at Rs 8,800 a month, was manufactured by an Indian generics company.

Indeed, the very process of creating affordable versions of existing products could be “innovative”. Consider, for example, Triomune, Cipla’s pioneering $1-a-day medication, formed by creatively combining three different anti-HIV drugs. Until then, patients had had to pay $ 10,000 a year, buying the medicines separately from three different pharma companies. Yet, Cipla is constantly painted as a pirate in global IP debates, a company that simply copies and rips others off.

What is the point of innovation if the benefits exclude a large percentage of the populace? India’s patent regime, under fire from angry multinationals and governments, is premised precisely on this —  innovations bestowed with a state-sanctioned monopoly (through a 20-year patent term) must be worked for public benefit.

Second, our innovation architecture ought to be democratic and open to all who wish to participate. Unfortunately, our current framework focuses almost entirely on the formal sector. And yet, a quick perusal of the informal economy demonstrates that creativity is not the preserve of the rich. Consider C. Mallesham, a school dropout from Pochampalli who invented an ingenious weaving machine after seeing his mother break her back weaving manually for hours on end. Mallesham demonstrated that innovation isn’t always driven by the lure of money. Or take Vellan Vaidyan, a tribal healer from Wayanad, who can reputedly cure a number of modern-day ailments. He insists that he is simply a conduit for higher forces and does not charge but simply leaves a box outside his rustic clinic for donations. A crude form of crowdsourcing, one might say.

How do we capture these innovations within our framework? How do we encourage them in a world where existing incentives —  expensive IP regimes and the like —  are more aligned with the interests of formal firms. More importantly, how do we learn from them?

Jugaad has come to be a derogatory term, associated with cutting corners to make a fast buck. But in a world where resources are scarce, jugaad has much to offer. Consider, for example, a rural child who puts a rubber band around a pencil so that the lead inside does not break when it falls. One may well call this jugaad, but is this not clever?

This is not to say that we ought not to aim for a new kind of lead or coating that prevents breakage. But space must be created for both forms of innovation to flourish. Indeed, like India, innovation is also plural and diverse. It need not be biased towards one kind of script, premised on the notion that big is better. Rather, like the economist E.F. Schumacher said, small can indeed be beautiful. The pharmaceutical industry, with its archaic blockbuster model has much to learn from this sentiment.

Perhaps the time is ripe to embrace an innovation ecosystem that is open, inclusive and diverse. It is time to accept this expansive notion and re-label “innovation” as “incluvation”.

The writer is founder of SpicyIP

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