From API to IP: Why India Must Back Medicinal Chemistry as a Strategic Service?

Policymakers must treat medicinal chemistry and early phase drug discovery as scientific infrastructure, central to India’s strategic ambitions, not merely a contract function.

Sep 02, 2025

Rishikesh Narayan, IIT Goa, India.

SDG 3: Health and Well-Being | SDG 9: Industry, Innovation, and Infrastructure
Institutions: Department of Science and Technology | Department of Biotechnology | Ministry of Health and Family Welfare

India supplies over 20 percent of the world’s generic medicines and exports pharmaceuticals worth more than $25 billion annually. Yet in the race to novel precision therapies, including antimicrobials and orphan disease treatments, India’s presence is curiously limited to a small role in the early-stage discovery and design of new drug molecules. Its advantage in chemistry has yet to translate into molecular invention.

At the heart of this paradox is the country’s underutilised scientific talent and institutional know-how capacity to develop Medicinal Chemistry as a Service (MCaaS) – a specialised, modular platform that enables the identification, design, synthesis and optimisation of new compounds across therapeutic domains. While contract research organisations (CROs) in India have long supported global pharmaceutical R&D, their services remain skewed toward foreign clients and late-stage development. The domestic ecosystem for translational chemistry, by contrast, is fragmented, underfunded and poorly aligned with national health priorities.

The Missing Link in India’s Biotech

MCaaS is foundational to modern biotech, enabling the conversion of biological targets into molecular candidates. In hubs such as Boston and Basel, medicinal chemistry services are embedded in academic centres, clinical labs and start-ups. Such early-stage platforms support everything from hit identification to lead optimisation – finding promising chemical structures and refining them for potency, selectivity, and safety – allowing even small teams to iterate compounds at speed.

India, by contrast, has deep chemistry expertise but lacks infrastructure to support MCaaS. Hyderabad and Bengaluru produce hundreds of organic chemistry PhDs and house world-class CROs like Syngene and GVKBIO, few offer synthesis-on-demand or probe design for Indian research groups. The issue is not capability but absence of systems and translational support. Meanwhile, Indian CROs routinely deliver synthesis for global biotech clients within days. The talent exists. The domestic interface does not.

What the US and Europe Got Right

In the United States, the National Institutes of Health (NIH) established the Molecular Libraries Program in the early 2000s, creating compound libraries and shared medicinal chemistry cores for probes discovery. This was complemented by Small Business Innovation Research (SBIR) grants, which enabled start-ups to access chemistry services without building in-house teams. Such systems accelerate proof-of-concepts into viable commercial products.

Europe’s Innovative Medicines Initiative (IMI) took another route, building consortia linking chemists, clinicians, and disease biologists. By decoupling early-stage discovery from big pharma, it enabled public labs and SMEs to co-develop candidate molecules. IMI1 and IMI2, delivered nearly 200 projects paving the way for the broader Innovative Health Initiative (IHI) in 2021, now a global benchmark for public–private partnerships.

India has no equivalent policy framework. Neither the draft Science, Technology and Innovation Policy (2020) nor the New Drugs and Clinical Trials Rules (2019) mention medicinal chemistry platforms. While the Biotechnology Industry Research Assistance Council (BIRAC) has strengthened parts of the biotech ecosystem, early-phase drug discovery remains outside its scope. Without intervention, India risks staying a supplier of Active Pharmaceutical Ingredient (API) for others’ innovations, rather than owning Intellectual Property (IP) in high-value drug discovery.

The Scientific Case for MCaaS

A robust MCaaS ecosystem in India could advance high-priority domains of public health and bioscience. Consider antimicrobial resistance (AMR), where India is one of the largest consumers of antibiotics globally, yet contributes less than one percent of compounds in the global preclinical pipeline. Similarly, rare and paediatric diseases, and vector-borne diseases such as leishmaniasis, dengue, and chikungunya also demand urgent investment. Over tens of million Indians suffer from such conditions, most of which lack high quality local research or therapeutic leads. MCaaS could enable academic labs and hospitals to generate candidate compounds from patient-derived data and move faster through the preclinical stages towards clinical trials and final approval.

MCaaS can also address industry and regulatory priorities, especially sustainable chemistry, now reshaping pharmaceutical synthesis. With the EU Green Deal and new Food and Drugs Administration (FDA) guidance pushing greener manufacturing, India can pioneer synthesis routes that offer both regulatory compliance and market advantage. Embedding sustainability at the molecular design stage would position India as a leader in sustainable pharma.

Beyond healthcare, MCaaS capabilities could extend to precision agriculture and materials science. In diagnostics, chemical probes discovered through MCaaS can strengthen validation of biomolecular drug targets, a crucial step for more robust clinical development. These spillovers align with the national missions of the Department of Science and Technology (DST) in bioresource innovation and technology convergence.

Economic Stakes and Strategic Leverage

The global market for MCaaS is projected to exceed $10 billion by 2030, driven by demand for modular discovery and a shift from vertically integrated R&D. With its chemistry talent and established CRO base, India could capture a major share if it moves from low-margin manufacturing to high-value services.

Today, most of India’s pharmaceutical value lies in API production and generic exports, both vulnerable to pricing pressure, regulatory scrutiny, and supply chain volatility. In contrast, MCaaS offer higher margins and strategic depth: early entry into the innovation cycle, influence over discovery agendas, and retain IP value within national borders.

Investment in MCaaS would also create a new class of high-skill scientific jobs; chemists trained across synthetic design, computational modelling, disease biology, and translational research. These roles could anchor India’s strategy to grow knowledge-intensive service exports and scientific sovereignty.

A Policy Blueprint

To unlock this potential, India must reposition chemistry as infrastructure – a shared national asset for innovation. A National Mission on Translational Chemistry, jointly led by DST, DBT, and ICMR, should set priorities, coordinate funding, and embed chemistry cores in leading universities and research hospitals. The new Anusandhan National Research Foundation (ANRF), with its mandate to foster collaboration and set research directions, could govern such a mission.

Shared medicinal chemistry cores, like genomics or imaging facilities, would give public labs, clinicians, and start-ups open access to synthesis and optimisation, lowering barriers to molecular innovation. In parallel, India must embed sustainability into MCaaS through green chemistry standards and incentives. Preferential procurement, carbon benchmarking, and technology adoption grants can accelerate eco-friendly synthesis, boosting competitiveness and compliance with global regulations.

The question is not whether India can compete in medicinal chemistry – it already does. What matters now is whether it will invest in the regulatory, infrastructural, and institutional systems that translate talent into impact. Treating chemistry mainly as manufacturing served the past, the future lies in reimagining chemistry as a flexible layer, embedded within the national innovation strategy. To lead in molecules – and make MCaaS a pillar of that leadership, India must first build the mechanisms.