This week on Walk The Talk, filmed on the sprawling campus of Biocon Ltd., its Chairman and Managing Director, Kiran Mazumdar Shaw speaks on how red-tapism and bureaucracy has crippled India's progress in the Science and Technology sector which is highlighted by the official policies which are very ad-hoc. She comments that her discontentment with the establishment led to Biocon shifting the clinical trials of drugs to the USA and that the last 10 years were "very frustrating" due to many regulatory hurdles. Taxation is another issue stunting Indian Science & Technology as Vietnam, Thailand, Malaysia offer more than just tax relief. Though on an optimistic note she says that India has a lot of potential with respect to Biology and Biotechnology sectors which in turn can help make India a global healthcare industry leader. "Make In India" is an extremely important theme to inspire and encourage high end technological industries.
Here is the full transcript of the show:
Shekhar Gupta: Hello and welcome to Walk the Talk. I am Shekhar Gupta and you know what you have heard about the fame old tiger of Mysore, my guest this week is the very famous tigress of Banglore, Kiran Mazumdar Shaw, welcome to Walk The Talk. This is really a fortress; this is your manufacturing hub, a Biocon part?
Kiran Mazumar Shaw: Well yes it is the largest bio pharmaceutical, bio-manufacturing hub in India, which I think something we are proud of.
Shekhar Gupta: And it's totally indigenous, it's the startup?
Kiran Mazumar Shaw: Absolutely.
Shekhar Gupta: It's not a foreign pharma company, that came to India and setup something or it's not a third generation thing?
Kiran Mazumar Shaw: No, it's totally home grown.
Shekhar Gupta: Feels good?
Kiran Mazumar Shaw: Feels wonderful because this is the largest bio-pharmaceutical hub actually in Asia, it is home to about 7000 scientists and technologists and it is the only hub which has research and manufacturing together
Shekhar Gupta: And I believe more than 10% of your staff have doctorates
Kiran Mazumar Shaw: Even a little higher percentage than that
Shekhar Gupta: And most of the rest are science graduates and postgraduates and engineers and we thought biology was no way to get a job
Kiran Mazumar Shaw: Well I think it's a most exciting area Shekhar. Today I think the biotech's area is such a wonderful space to be in because I think its opportunity are limitless, because its not just about bio-pharmaceuticals, its about agri-bio, its about enzymes, its about bio-informatics, its about bio-IT and so on
Shekhar Gupta: It's about seed, it's about everything and yet this sector has been hobbled very badly
Kiran Mazumar Shaw: It has because I think there's hasn't been a cohesive focus on biotechnology, I think policies have been very ad-hoc; there have been pulls and pushes. We had huge challenges in biotech sector, regulatory challenges are the biggest challenges in the sector.
Shekhar Gupta: So are being driven away from India in biotech
Kiran Mazumar Shaw: Well you know let's put it this way, I think there have been really grave challenges for us to address in this particular sector. For instance you know fortunately we are not in agri-biotech but the agri-biotech sector has suffered very badly because of huge aversions to genetically modified crops or even trials of GM crops. In our sector we are confronted with the clinical challenge, because clinical trials have been put on hold for a very long time and that is absolutely defeating this whole concept of innovation and drug innovation, and in our sector we are so dependent on clinical development for any kind of bio-pharmaceutical activity
Shekhar Gupta: And if we can't sort that out that all Indian entrepreneurs like you will be reduced to making generics and not discovering your own molecules
Kiran Mazumar Shaw: Absolutely. I mean on one side government is spewing out this great rhetoric of innovation and Make in India and on the other hand they are constraining you, stifling you and stopping you from making new drugs or even developing drugs that need clinical trials. Every drugs need a clinical trial, even a generic need some amount of clinical trials
Shekhar Gupta: No I am asking what are the drugs you have been working on, were you feeling hobbled?
Kiran Mazumar Shaw: Well you know we have been developing insulin, insulin analog, we have been developing bio-similars, we have been developing very important novel molecules like antibodies and many of these and we are also developing oral insulin
Shekhar Gupta: You carry a little bottle in your bag. I find white tablets that say nothing
Kiran Mazumar Shaw: I mean that's a very exciting programme and yet we have been challenged, we not been able to do the important clinical development
Shekhar Gupta: You can't do those clinical tests in India?
Kiran Mazumar Shaw: Well its not that you can't do that but it takes forever to get approval and you know time is money. I mean I have lost one valuable year out of the development timeline for oral insulin
Shekhar Gupta: And this is the diabetic capital of the world
Kiran Mazumar Shaw: And that has necessitated me to take this clinical development programme to the US
Shekhar Gupta: So you are testing your own oral insulin in America?
Kiran Mazumar Shaw: Yes because I couldn't do those trials in India because we didn't get the approvals in time
Shekhar Gupta: So this is really reversing the equation, because I thought the propaganda was that MNC's from rich countries came to our countries for clinical trials and used our poor innocent people as guinea pigs, its happening the other way around
Kiran Mazumar Shaw: Well, first and foremost I take a strong view of this use of the word guinea pigs because it is not to be used that way. I think today we are talking about doing responsible clinical trials, doing ethical clinical trials, its about making a difference in improving health care. I think this is really bad propaganda, unfortunately this whole clinical research, the arena has been hijacked by the NGO's and lay people, who have basically created this kind of fear among the lay persons, thinking that companies go about doing clinical trials in a very unethical way, that's not true. I think every sector has errant players and instead of penalising those who don't comply or those who abuse the system, you block everybody
Shekhar Gupta: And you say go to America because they have their regulatory system in place, which if you defy, you pay for it, you pay very dearly. So is there paranoia about science in India?
Kiran Mazumar Shaw: I think there's a certain paranoia about science because there is a certain risk related to science which people are very wary about, and therefore there is an inherent risk aversion to science and technology or at least science and technology of unknown
Shekhar Gupta: But that's the distinction between science and technology, science is a quest for the unknown
Kiran Mazumar Shaw: Absolutely, so you very rightly said that
Shekhar Gupta: Mangalayaan going up is a wonderful thing but that's technology, its not much science
Kiran Mazumar Shaw: Well there was a lot of unknown in the Mangalayaan mission because they had a lot of guestimates going in terms of how they would finally use this gravity pull
Shekhar Gupta: That was science going into a sort of dovetailing into the technology, but not basic research driven by curiosity
Kiran Mazumar Shaw: Well there was lot of curiosity, I won't sort of dilute that bit, but getting back to our science there's a lot of unknowns just because we have a lot to discover of disease itself, there are so many questions to be asked about that. Why do we get certain diseases, why do we get cancer? You know there are so many counterviews about what causes cancer. Today you know the whole debate on cancer is that is it accidental? It's about the quirk of faith and there are others that say, do you have genetic predisposition to cancer and do you have carcinogens that cause cancer? There is a multiplicity of various reasons but that's what the quest of science is all about, you have to discover what causes certain diseases
Shekhar Gupta: There is a fear of unknown in India
Kiran Mazumar Shaw: In India I personally believe yes, there is a clear fear of unknown, there's a lot of risk aversions in science and technology, they want predictability in everything they do and it starts from people, it starts from investors, it starts from the regulators, you see that mindset across the society
Shekhar Gupta: And you have been fighting. That's the reason I have introduced you as a tigress of Bangalore. You have been trying to change this. How successful have you been in the past 10-12 years?
Kiran Mazumar Shaw: Well I would like to feel that we have made a big difference using innovation as our platform, we were able to bring 2 very important molecules in the market, one was an anti-cancer drug for an hidden neck cancer bio-map, EGFR...
Shekhar Gupta: Which cancer?
Kiran Mazumar Shaw: The head and neck we call it and that affects 30% of cancer patients in India, largely because of the tobacco chewing habits that Indians have and that drug has made huge differences to a large number of cancer patients who suffer from these kind of oral cancers and hidden neck cancer.
Shekhar Gupta: So the price is much lower in India?
Kiran Mazumar Shaw: Absolutely and that was a big moment of pride for us. And then we recently introduced another drug which is a very unique drug, it is ANTI-CD6 antibody that basically targets a certain pathway which really triggers auto-immune diseases, and in that we first got it approved for Psoriasis and its a very interesting drug. And now we realise that it's actually implicated in many other autoimmune diseases like multiple Psoriasis, Lupus and many other diseases, which are subsets of these kinds of disease. And its non-steroidal, its targetted, its immuno-therapy so it basically works on that bit of immune system that suddenly malfunctions, so it's basically rebooting the immune system, correcting the immune system
Shekhar Gupta: Because in some ways auto-immune diseases are the last frontier of medical science
Kiran Mazumar Shaw: Absolutely and now I think there's a huge focus and understanding on immunology
Shekhar Gupta: Most of these are quality of life diseases, many of them threaten our life but most of them are quality of life diseases
Kiran Mazumar Shaw: No, the immunology and the immune system mediates so many diseases including cancer
Shekhar Gupta: And that's when you get into debate about what is inflammation? How does the immune system relate to this? Now I see something new saying that even depression might be related to inflammation, so we don't know, everything is changing, these are the uncertainty of science that you talk about
Kiran Mazumar Shaw: Absolutely and that's it's all about and that's what research and quest of research is all about
Shekhar Gupta: So in your fisticuffs with authorities have you found people sympathetic, have you find them stupid, have you find them just risk averse or do you sometimes think that you have to deal with people who don't understand science at all, who don't appreciate science at all?
Kiran Mazumar Shaw: I have met all these people. I believe we have people who are very knowledgeable, there are experts who we should use much more that we are doing today, there are people who don't know a thing but they want to pretend they know it all and there people who are in between. Now I think this country has to focus on building expertise and experience because this is about building experience. If you don't encourage people to start getting deeply interested and involved in clinical research, you are not going to get that in-depth understanding and we have very strong medical cadre who are capable of doing this
Shekhar Gupta: And we have very strong biology base in India
Kiran Mazumar Shaw: Absolutely and therefore we should leverage that biology base, we should use it to our advantage and we should build innovation based on that. I think today our regulatory framework has to support that and if our regulatory framework does not support that and is going to be risk averse then I think we will suffer very badly and we will lose out of on huge opportunity
Shekhar Gupta: Have last 10 years been particularly frustrating?
Kiran Mazumar Shaw: It has been very frustrating, largely because of the fact that we have seen this clinical hold which has actually put a full stop on a lot of very important innovation programmes and for us we have suffered very badly
Shekhar Gupta: So explain this clinical hold to an idiot like me
Kiran Mazumar Shaw: Well you know basically it all started with an NGO that filled a PIL in terms of clinical trials in India, where they basically said that clinical trials should not be conducted in India because there's likely to be abuse, exploitation of people, because of ignorance and poverty. And this particular PIL was admitted in the Supreme Court and the Supreme Court instructed the Drugs Controller to put a hold on clinical trials until they came up with guidelines to rectify a lot of these concerns. You know the first question I have to ask is I don't see this any practice in any other country
Shekhar Gupta: Judiciary takes precedence over the Regulator
Kiran Mazumar Shaw: Absolutely, it is the Regulator responsibility to address and answer certain question and to make sure even if there's such a PIL, they should argue it immediately with the Supreme Court and say look, we do not agree with this or if there are aspects that they agree we will fix it
Shekhar Gupta: We will be responsible if something goes wrong
Kiran Mazumar Shaw: And we will be responsible if something goes wrong. But that was not the way it was addressed
Shekhar Gupta: But this has led to a clinical hold, so all research has come to a standstill
Kiran Mazumar Shaw: Yes, so clinical trials were put on a hold and everyone was instructed that no more clinical trials till basically we have a clear guidelines on clinical trials. By the way those guidelines are yet to be announced.
Shekhar Gupta: That is why people like you have to find people who do clinical trials in America?
Kiran Mazumar Shaw: Correct
Shekhar Gupta: So that revenues get shifted and frankly knowledge gets shifted
Kiran Mazumar Shaw: And that is most unfortunate
Shekhar Gupta: Most unfortunate
Kiran Mazumar Shaw: So I think it is about time because we have taken 3 years to come up with these guidelines which is too long a time. There are international best practices of conducting clinical trials which all of us abide by and conform to. So I don't see why, if we don't conform to these trials, that you know we have to now abide by a different set of guidelines and now these guidelines, which are yet to be adopted, are now seeking to kind of change the set of norms guiding clinical trials. Some of them are pretty decent recommendations
Shekhar Gupta: But it is taking too long
Kiran Mazumar Shaw: But it is taking too long
Shekhar Gupta: It is not necessary to see every biotech entrepreneur as a thief or as murderer?
Kiran Mazumar Shaw: Absolutely no, but we are all trying to actually make a difference to healthcare. We are trying to save lives. We are trying to improve people's quality of life. We are certainly not doing any of what is being suggested
Shekhar Gupta: You have had to take overseas because of the blocks here not just your research, but a lot of your production as well. I think you have a big plant in Malaysia?
Kiran Mazumar Shaw: You know I think the new Make In India theme is an extremely important theme because this facility itself shows you what is possible
Shekhar Gupta: Yes you can make in India. I have seen your production labs inside. They look like space labs because I see people walking around in space, what look like space suits
Kiran Mazumar Shaw: So this is a big opportunity for India
Shekhar Gupta: Under several air curtains, physical curtains
Kiran Mazumar Shaw: Yes, so this is a big opportunity for India because high end bio-pharmaceutical manufacturing is a huge opportunity for India, and I think this is where India can make a difference to global healthcare and create a big business out of this kind of manufacturing
Shekhar Gupta: Because you make the new insulin, which is available at the fraction of the price of the imported items
Kiran Mazumar Shaw: India is about affordable innovation
Shekhar Gupta: And doctors tell me as good
Kiran Mazumar Shaw: Absolutely, I think this is the big opportunity that India has. Now the big deterrents to this are the following. The supporting infrastructures are not optimal. For instance, on this particular facility we have our own captive power, our own captive affluent treatment facility; our own captive water treatment facility etc, etc, etc. Logistics are really pathetic compared to other parts of the world. So you see it is a challenge. We are willing to face that challenge provided we get some support from the government. But guess what, this is an SEZ and yet after promising us a tax-free regime you suddenly introduce MAT
Shekhar Gupta: MAT is Minimum Alternate Tax
Kiran Mazumar Shaw: Absolutely and so it is a kind of a tax introduced with stealth after you basically lure us to make all the investments
Shekhar Gupta: No wonder you ran away to Malaysia
Kiran Mazumar Shaw: Malaysia has the most attractive tax incentives. So they welcomed us. They have great logistics, they have great infrastructure
Shekhar Gupta: There are questions about their airlines, so be careful
Kiran Mazumar Shaw: Well, I don't want to comment upon that. I don't have to worry about their airlines so much. Yet when I compare Malaysia and here, I would look at it in two ways. Malaysia, great infrastructure; great support; great governance in terms of us functioning and operating there; but in terms of cost competitiveness nothing to beat India, let me tell you that. We will still continue to make the lowest cost bio-pharmaceuticals out of India
Shekhar Gupta: And also the skilled manpower
Kiran Mazumar Shaw: Yes, that is a big, big factor, because all our key operations are being run by people out of India and that is a big advantage India has. So the government needs to really focus on supporting this sector. See there is another aspect of this sector, which I would like to mention by taking advantage of your show. The bio-pharmaceuticals industry is one industry where there is a gestation phase in terms of taking the product to the market
Shekhar Gupta: Right
Kiran Mazumar Shaw: So when you make your investments, even if the plant is up and running, it takes us 2 years to get regulatory approvals from international regulators. That means if you start the meter for tax-free incentives on Day 1 of starting operations...
Shekhar Gupta: Time is lost
Kiran Mazumar Shaw: ...then you lose 2 years of tax-free credit
Shekhar Gupta: In fact it may take you that much longer just getting routine clearances in India
Kiran Mazumar Shaw: What we are saying is extend the tax credit for SEZ in Bio-pharmaceuticals by 2 years, because that is time it takes to get regulatory approvals. Don't deny us the extra tax credit because the investments, which we make, are huge and the gestation timelines that takes us to get regulatory approvals before we can export are against us
Shekhar Gupta: This, I am coming back to this thing about science. I sometimes think we are country of Luddites. We are afraid of science and we celebrate every engineering and technological success as great science. That is my argument with Mangalayaan also that anything that is going into the area of the unknown, either we are afraid of it, or we say was discovered in Vedic times. So what is new?
Kiran Mazumar Shaw: You know that is the point I want to question. In Vedic times we had the great quest for the unknown. We did wonderful things; we celebrate our past vigyaan and our wonderful heritage of science and technology of the Vedic times. What happened? Why is that we have declined to this level? Why is it that we are so scared to do something novel or new or look at the unknown?
Shekhar Gupta: It is something, which is politically incorrect to say it so let me say it, not you, that we take pride in our technological achievements, accomplishments of the very distant past. Planes travelling back and forth between planets and all that and yet our public opinion is fixated with a charkha mentality, spinning wheel mentality
Kiran Mazumar Shaw: You are absolutely right I think we need to move beyond that, we need to get confidence in our ability to conduct high end research and that is why I always say ISRO has it in it, to actually do high end research. They can actually make a success of Mangalayaan, they are capable of doing much more
Shekhar Gupta: In fact ISRO is a very good example of how state funded research works. It can work if you give autonomy
Kiran Mazumar Shaw: Actually it is true and it shows. You know when I meet scientists, today they in research laboratories in the country. Some of these are centers of excellence where the scientists are fired up. But you know what is wrong in science and technology in India, there is no freedom to think and operate and be creative. We need to free up the Centre for Science and Technology and centres of research, only then they will become centres of excellence
Shekhar Gupta: Yes because science and curiosity is about questioning the current hypothesis
Kiran Mazumar Shaw: Yes and you know there is another problem in that, because all these divisions that we have in our government are actually run by administrators, who don't have domain expertise. So what happens in every one of our Ministries, whether it is our Health Ministries, whether it is the Agriculture Ministry, whether it is our Science and Technology, I would say the Science and Technology is an exception because you do have scientists at the helm. But in most of the other Ministries...
Shekhar Gupta: Ministers are actually the problem there?
Kiran Mazumar Shaw: No it is not really true, it is the bureaucrats, they are generalists, they are not people who are technical
Shekhar Gupta: No, I said in Science and Technology
Kiran Mazumar Shaw: Yes
Shekhar Gupta: In fact UPA used it as their parking lot, anybody who was not wanted anywhere else was sent to...
Kiran Mazumar Shaw: Absolutely. That just shows you how little focus there is on science and technology and how little regard and respect there is for science and technology, because it is always considered to be not such an important portfolio. Where as to me science and technology should be one of the most prized portfolios in a country like India if we believe in innovation, if we believe in all the strengths of innovation and science and technology that we are talking about
Shekhar Gupta: Kiran, I know you will keep on fighting, now you will get more success because government is more open minded towards industry. Are you optimistic now?
Kiran Mazumar Shaw: I am very optimistic now, but right now I would like to see this very strong messaging translate into ground reality. I am still impatient to see that happen. But I am sure it will. We get that sort of feeling of wanting to do all that and that political willingness to get going in all that we hear from the government. I just hope there is bureaucratic will also that is aligned with the political will
Shekhar Gupta: You bring a rare passion to your business, as it is not about turnover, it is not about market cap, I know your market cap is inching closer to 1.5 million dollars now. It is not about that. I know you are a very intense person. For example your part of the focus on cancer is also driven by personal challenges and tragedy in the family, friends
Kiran Mazumar Shaw: Absolutely, that is from my philanthropy side of things where I want to focus and devote my philanthropy to cancer research and also hospitals. But I think I am very passionate about innovations, very passionate about bio-pharmaceuticals. I am very passionate about India's place in bio-pharmaceuticals and that is what I really want to drive and create leadership for in India, because I really think it is possible
Shekhar Gupta: And you are very passionate about Bangalore, which might get a distinction now, unhappy distinction of building the second slowest metro now in the nation after Kolkata
Kiran Mazumar Shaw: Very sad and that is poor governance
Shekhar Gupta: So you contribute to that also. You have your B-pack and you go with gloves or and off, you fight...
Kiran Mazumar Shaw: That is why we created B-pack to basically be a pressure group, which drives good governance
Shekhar Gupta: It is a citizens group...
Kiran Mazumar Shaw: It is a citizens group. We want to drive good governance and we want to pressurize the government into providing better governance. It is a slow big haul, but I think it will happen
Shekhar Gupta: But Kiran tell me what makes you so different from other Indian businessmen? All of them give the Finance Minister 10/10. If they could they would give 11/10 on the day of the Budget. They praise every government while on the sidelines they say margaye. You never mince your words, whether on twitter or in public speech. You are not afraid
Kiran Mazumar Shaw: Because I want India to be a great country. I want India Inc really to be a strong sector for India and I want the government to do its bit to get us there. By paying lip service you are not going to get the government to do anything, but by constantly challenging the government I think you will get them to act. That is the way I see myself
Shekhar Gupta: And keep on paying your taxes so that nobody can come after you
Kiran Mazumar Shaw: You know I personally believe that I don't need any favors from the government and I just want the government to do what it is supposed to do and to do it well
Shekhar Gupta: And not get in the way, for example in recent past the clinical trials were even put under the Environment Ministry. So that was one more set of clearances
Kiran Mazumar Shaw: I mean it is very sad what is happening, but I think if we really focus on simplifying regulation, giving more clarity to rules and regulations, I think we will see the lighter day at the end of the tunnel
Shekhar Gupta: Don't just fight bio-medical also fight for agro-biotech. That area is finished right now
Kiran Mazumar Shaw: Well we are
Shekhar Gupta: Agricultural scientists in IARI, they are crying
Kiran Mazumar Shaw: Well fortunately I think the Minister has actually made a very bold statement, he actually said that he is not going to stop field trials and I think he is one Minister, who I have met personally, who is very committed to bio-technology so I have hope there
Shekhar Gupta: So you are not afraid of GM foods?
Kiran Mazumar Shaw: I am not at all. I mean I really think if you understand science there is nothing to be afraid of
Shekhar Gupta: And you have dealt with cancer in your very close circle?
Kiran Mazumar Shaw: Absolutely, come on we all, we all basically consume genetically modified foods everyday without us knowing us or admitting it
Shekhar Gupta: I don't know from where this soybean oil comes from. But I clarified, it comes from America, so we have to give up this fear
Kiran Mazumar Shaw: Absolutely, the day we stop fearing science we will win
Shekhar Gupta: It will be a long haul Kiran and we might do it if you continue to be a tigress like this
Kiran Mazumar Shaw: Well I will never give up
Shekhar Gupta: That is why I so cherish your friendship
Kiran Mazumar Shaw: Thank you Shekhar, wonderful pleasure