GenAI can cut drug development costs by up to Rs 8 lakh crore: EY-Parthenon report

The Indian pharmaceutical industry, known for its production of generic medicines and low-cost vaccines could potentially further slash drug development costs by $60 billion to $110 billion (Rs 4,46,400 crore to Rs 8,23,200 crore) through the adoption of Generative Artificial Intelligence (Gen AI), said a report by EY Parthenon (EY-P), a strategy consulting firm, in partnership with BioAsia.

The report titled, ‘From volume to value: Indian pharma’s transformation with data and AI’ was released at the marquee life sciences summit - BioAsia 2024 in Hyderabad on Tuesday.

The disruptive technology holds the key to faster, more efficient drug discovery and a greater emphasis on innovative treatments, the report said. Gen AI's impact isn't limited to financial savings. It has the potential to significantly shorten timelines, from identifying new drug targets to getting medications ready for clinical trials, the report said.

It cited that companies like Exscientia and Recursion are already reporting early-stage cost savings of 25% to 50% through AI-powered drug discovery. The ability to quickly synthesize potential drug candidates and predict their effectiveness could revolutionize the industry.

The Indian pharmaceutical industry, the report said, is gearing up to embrace Gen AI and data-driven approaches in research and development. Despite challenges in competing with major companies in the United States and Europe, Indian companies are exploring the potential of AI to drive innovation and accelerate drug discovery.

“Larger gains are to be witnessed in areas such as R&D, manufacturing, and supply chain management, where both artificial intelligence (AI) and GenAI are poised to deliver substantial operational efficiencies. While we celebrate the remarkable gains, it is imperative to underscore the importance of data governance and management,” said Suresh Subramanian, Partner & National Life Sciences Leader, EY Parthenon India.

The Indian government is fuelling this transformation with initiatives like the Promotion of Research and Innovation in Pharma MedTech Sector (PRIP) scheme, injecting Rs 5,000 crore over five years to cultivate an innovation-driven ecosystem. With its robust IT sector, India is well-positioned to lead the way in this exciting new era of drug discovery, said the report.

But as the industry embraces AI, certain challenges must be addressed, said Subramanian. Ensuring the ethical use of AI to avoid biased or inaccurate results is paramount. Moreover, safeguarding intellectual property (IP) with robust cybersecurity measures is essential to protect sensitive clinical data and prevent the loss of competitive advantage, it said.

The report highlighted that collaboration between the government and the industry will be crucial in building the necessary infrastructure and establishing a supportive regulatory framework aligned with international standards.

“This technological fusion is propelling advancements across the entire life sciences value chain. The transformative impact of GenAI on the life sciences sector is significant, ranging from catalysing drug discovery, clinical trials, and enabling precision medicine to streamlining healthcare operations. Healthcare delivery mechanisms too are undergoing profound reshaping due to innovations in data and GenAI,” said Shakthi Nagappan, Director of Life Sciences, Govt. of Telangana, and CEO of BioAsia.

The report also pointed out that the pharmaceutical industry has been experiencing a drought in new antibiotic development over the past few decades, with most recently approved antibiotics being variations of existing drugs. The conventional drug discovery process has been slow and costly, requiring extensive trial and error cycles for candidate identification, pre-clinical trials, regulatory approvals, and commercialisation, often spanning up to 15 years.

The emergence of Artificial Intelligence, particularly Generative AI (Gen AI), is now offering a promising alternative to traditional screening methods, revolutionizing the drug development landscape. Gen AI accelerates drug discovery, reshapes clinical trials, and guides scientists in developing new treatments for various diseases, including cancer, Alzheimer's, arthritis, fibrosis, and rare diseases.

Leading pharmaceutical companies like Merck and Pfizer are actively leveraging the power of Gen AI in their drug discovery efforts. Merck employs its proprietary platform, AIDDISON, while Pfizer utilises Gen AI-powered chatbots for personalised communication with clinical trial participants, the report cited.