The challenge facing MSME pharma researchers in India

As India works to move beyond its identity as the ‘pharmacy of the world’ and position itself as a global hub for pharmaceutical innovation, one regulatory issue deserves urgent attention. The current framework for new drug approvals creates a structural imbalance that places a disproportionate burden on the first applicant, while allowing later entrants to benefit from the same scientific effort at a much lower cost.

How it works

In practice, the first applicant must take on the full challenge of introducing a new drug in India. This means conducting local clinical trials, generating safety and efficacy data, following a complex regulatory process, and investing substantial time and money over several years. Yet once that approval is granted, subsequent applicants may often seek approval for the same drug by relying on chemical, pharmaceutical, and bioequivalence data alone, without repeating the same clinical research.

This creates an uneven system. The first applicant carries the full scientific, financial, and regulatory risk. The second applicant enters the market more easily and at far lower cost. The innovator, despite making the original investment, receives little regulatory advantage in return. For research-driven MSMEs, this acts as a strong disincentive and makes new drug development in India unattractive.

Why this matters

This imbalance is especially problematic for small and medium-sized pharma innovators. Unlike large multinational companies, MSMEs typically operate with tighter budgets and fewer resources. When they see that years of clinical research can be quickly replicated by others without similar effort, many become cautious about taking on the risk of innovation at all.

The result is not just a challenge for individual companies: it is a broader loss for India’s innovation ecosystem. If the system does not reward the first mover fairly, domestic companies may gradually shift away from high-risk research and rely instead on discoveries made elsewhere. That would run against India’s long-term ambition to become a true leader in pharmaceutical innovation.

A possible solution

One practical way forward is to introduce a defined period of clinical data exclusivity for the first applicant that generates the clinical evidence. Under such a system, the data submitted by the innovator would be protected for a specific duration and could not be relied upon by later applicants during that period.

This would not block competition. Instead, it would create a fair window for the innovator to recover part of the investment made in research and development before others can use the same data. Even a limited period of three to five years could make a meaningful difference by restoring balance and encouraging more private investment in clinical research.

Why are patents not enough?

Patents are often seen as the main safeguard for innovation, but in pharmaceuticals the reality is more complex. Many important advances do not always enjoy strong patent protection. These may include repurposed drugs, new delivery systems, improved formulations, or new therapeutic uses for existing molecules.

In such cases, the absence of meaningful patent coverage leaves innovators exposed. They may invest heavily in clinical research only to see their work replicated rapidly by others. For MSMEs, that risk is particularly difficult to absorb.

Supportive framework needed

India has already taken encouraging steps to promote research and innovation through initiatives such as PRIP (Promotion of Research and Innovation in Pharma MedTech sector), Atmanirbhar Bharat, and other R&D support programmes. These efforts show a clear intent to strengthen domestic innovation and build a more self-reliant pharmaceutical ecosystem.

But without regulatory protection for clinical trial data, the full impact of these initiatives may remain limited. Policy support for innovation must be matched by a framework that protects the value of the evidence innovators generate.

If this structural gap continues, it may unintentionally discourage Indian companies from investing in original research. That would weaken the country’s scientific base and slow its transition from a manufacturing powerhouse to an innovation-led pharmaceutical leader.

A balanced clinical data exclusivity framework would reward risk-taking, encourage more clinical research, and strengthen the domestic innovation pipeline.

Looking ahead

For India’s pharmaceutical future, the question is not whether competition should continue. The real question is whether innovation will be given a fair chance to grow. A system that protects the first mover’s clinical effort for a reasonable period would not only support MSMEs, but also advance India’s larger goal of becoming a global centre for pharmaceutical discovery.

(Nikkhil K. Masurkar is CEO of Entod Pharmaceuticals. nikhil@entodpharma.com)