The COVID-19 pandemic was a watershed moment for our country. While the pharmaceutical sector was robust, it lacked the capacity to produce specialised molecular components at scale. At the start of 2020, nearly all of the 20-plus reagents and enzymes required for making the vaccine kits were imported. Supplies were also vulnerable as the countries where these came from struggled with their own outbreaks.

The pandemic brought to light bottlenecks in the supply chains that support research, development, and manufacturing in the biotechnology and health sectors. Vast arrays of specialty reagents are required to drive innovation in new therapeutics and to make accurate diagnostic kits.

One example is nucleotides and their analogs. Nucleotides are the building blocks of DNA and RNA. Clever chemical modifications of these compounds give us nucleotide analogs. When used in PCR kits, the analogs have greater sensitivity in the diagnosis of diseases such as tuberculosis and dengue.

Some analogs are used as therapeutics. The antiviral drug remdesivir, when picked up by a replicating pathogenic virus because it resembles the natural nucleotide adenosine, can stop the virus from proliferating. During the pandemic, modest evidence suggested that it could reduce the time to recovery from a severe COVID-19 infection. Other exotic nucleotide analogs have been used to silence genes — as in the case of the enzyme responsible for overproducing oxalate, which ends up forming kidney stones.

News headlines focus mainly on breakthroughs in curing diseases. The infrastructure needed to enable that research gets little attention except in times of crisis. Thanks to the lessons learnt during the pandemic, the industry that makes specialty biochemical reagents and laboratory products is now in a phase of high growth. But the going is not easy for the innovation-driven small and medium Indian companies that make these products. They have to compete with large multinationals that dominate this sphere worldwide.

Indeed, many small companies start off as distributors of imported products. The Hyderabad-based company Biochem Desk, headed by researcher-turned-entrepreneur Shraddha Goenka, started off two decades ago as a distributor and now manufactures high-purity custom nucleotides and provides deep technical support required to use these exotic chemicals at R&D institutions. Similarly, other small- and medium-sized enterprises (SMEs) like Mylab Discovery Solutions in Pune and Chennai-based MagGenome Technologies chip away at India’s 80% import dependence for high-end laboratory supplies.

But there are many regulatory hurdles that Indian startups in this space face. Maintaining high-level regulatory compliance can affect SMEs more than large multinationals. Inverted duty structures mean that they import their starting material and equipment at a much higher tax rate while selling their finished kits at lower tax slabs.

Government programmes such as the Biopharma SHAKTI initiative and the BioE3 Policy, that promote biotech start-ups, will create a growing demand for reagents, molecular biology kits, and cell and tissue culture products. There are now around 11,000 biotech startups in the biotech clusters of Bengaluru, Lucknow, and the National Capital Region, in Hyderabad’s Genome Valley, and in other places.

There are many incentives offered by regulators to the makers of a final product such as a vaccine — but not for the companies that produce ingredients that go into making the vaccine. Incentivising the creation of the ingredients that go into the making of successful biotechnological products would go a long way towards attaining a self-reliant India.

This article was coauthored by Sushil Chandani, who works in molecular modelling.

dbala@lvpei.or; gsushilchandani@gmail.com