Dr. Krishna Ella is an alumnus of the University of Wisconsin and the founder of Bharat Biotech in Hyderabad. MIT’s Technology Review recently covered the unique challenges he faced when doing business in India. His first challenge, before the Indian economic boom: desis skeptical of returnees.

Ella and his wife had to spend the first months convincing banks to loan them money. It didn’t help that Ella was a repatriate. “Nobody could understand why someone would come back to India,” Ella says. “Everyone’s first question was: ‘What went wrong in America? Did you break some sort of law?'” [Link]

That’s actually still a good question, given that the former chairman of U.S. Airways left that collapsing company and is launching an Indian airline. Ella’s second challenge: routing around the famously inflexible Indian labor market.

As Ella’s business blossomed, though, he faced a classic Indian problem: how to avoid becoming dependent on local labor unions. His solution was practical — and radical: “We chose a poor village in three of the poorest states of India and offered training to their best students, with a promise of at least two years’ employment…” Today, much of the company’s skilled labor force is made up of people who sometimes can support an entire village with their salaries… [Link]

Third challenge: preparing dossiers on which bureaucrats were the least corrupt.

“It was my experience that 90% of the bureaucrats were just in it for the bribes and 10% were really interested in using their position to help the people and the country,” Ella says. He did background research on the employees of an agency from which he needed permits or regulatory approvals, then concentrated his paperwork on the most honest clerk in the department. Further, if a bureaucrat was rude or unhelpful, Ella approached them like he would a potential customer, returning several times to explain his situation in polite and persuasive language. [Link]

And the final challenge, perhaps the most familiar for someone with Ella’s training: the product itself. He had to figure out how to make a cheap hepatitis B vaccine.

Ten years ago Krishna Ella spotted that the purification method SmithKline Beecham used to extract the vaccine protein was relatively inefficient and costly. The multinational was using – and still uses to this day – a technique called ultracentrifugation, in which samples are subjected to 100,000 times gravity to separate the protein from DNA. The equipment cost over $1.5 million and only recovered 15 per cent of the protein. What is more, the technique used caesium chloride, which is expensive and has to be completely removed from the final product because it is toxic…

The vaccine protein has a phospholipid tail that is electrically neutral, unlike most of the yeast proteins and DNA, which carry an electrical charge. With Ella’s method, called the Himax technique, the vaccine protein can be made to precipitate out of the solution onto a special matrix, while all the charged molecules stay put. Bharat has since started manufacturing other products, such as a typhoid vaccine and an antibiotic for use against staphylococcus bacteria… [Link]

In the end, Ella prevailed and brought the cost of hepatitis B vaccines down from U.S. prices to one much more affordable for the developing world:

“He single-handedly brought down the price of Hepatitis B vaccination from $22 per child to a few pennies,” says C. Durga Rao, professor of virology at Bangalore’s Indian Institute of Science. “Without Bharat, nobody in India would be getting vaccinated for that disease today…” [Link]