Pharmaceutical innovation has occurred in many settings, but the challenge before us is today one of how can we make vaccines for major diseases that have been largely ignored.

The solution to this problem has eluded the world because we have not able to align the three basic processes of innovation, incentive and access so that they become mutually supportive.

The present system of pharmaceutical innovation has incentives for the Type-I diseases that affect the populations of the developed world. It is embedded in the enforcement of patent monopolies that permit sales at prices far above production costs.

Industry has little financial incentive to develop products for diseases that mainly afflict the poor, and the poor cannot afford products that are developed for wealthier patients.

'Drug discovery' research is slowly finding its feet in India. However, the promise of investment by many companies in this research is again geared to the discovery of drugs for those therapeutic categories that have worldwide markets.

They are also following the model of innovation for supra-normal profits and not caring for the medical needs of the poor of India. Mostly, the companies are interested in investing in incremental innovations.

Since India lacks in the capacity for 'drug development,', they have also, therefore, chosen to work with pharmaceutical multinationals. By following this strategy for product development, the companies are destined to invest mainly in research for diseases in which these multinationals too have interest.

Indian drug companies are doing reasonably well in the supply of generics to regulated markets of the developed world. They are also required to invest in R&D and technological upgradation to succeed in competing with the existing competition in these markets for generics. Given the fact that their resource position is limited and they do need larger markets to obtain sufficient returns on R&D for new product development, there are choices to be made by the Indian industry.

Rather than devoting itself to mainly lifestyle diseases, the industry must be made to take up new product development for major diseases that afflict the Indian population and are being ignored by big pharmaceutical companies.

Clearly, the Indian government has a role in shaping the industry's strategy to move in the direction of optimal solutions. It can provide incentives that reward innovation in proportion to its impact on the neglected diseases.

It can help the drug development capacity to facilitate such policy reforms that would correct the disparities in R&D and benefit all stakeholders. Through the efforts of the laboratories of the Council of Scientific and Industrial Research, it can help bring down the costs of drug innovation for the industry as a whole in respect of Type-II and Type-III diseases which affect the populations of developed and developing counties far more.

More cooperation, rather than wasteful, rivalry-oriented competition, would have to be encouraged. The Indian industry is already offering a pharmacy to the world as a whole in generic markets.

It can do the same in respect of new product development. In fact, India would be reaping even more benefits from the emerging opportunities in contract R&D and manufacture of bulk drugs.

The writer is a scientist with the National Institute of Science Communication and Information Resources (NISCAIR), New Delhi.