Centre to consult industry on ₹6,500-crore pharma incentive plan

The Hindu- Business Line
12 June 2020
Maitri Porecha

Central Drugs Standard Control Organisation (CDSCO) is set to hold a meeting with all associations of pharmaceutical manufacturers in connection to nearly ₹6,500 crores that the centre is planning to dole out as incentives for local production of drug raw materials to domestic producers. 

The meeting is slated to occur in three phases on June 13 over video conference to discuss draft guidelines of the production linked incentive (PLI) scheme. The PLI scheme is being floated for promotion of domestic key starting materials, drug intermediaries and active pharmaceutical ingredients for antibiotics, steroids, anti-tuberculosis (TB) and diabetic medication amongst others identified as critical for manufacturing in India. 

For 20 years now, India has been importing KSMs and APIs crucial for drug manufacturing from China. For instance, Penicillin is a key raw material made by fermentation technology used in manufacturing APIs like Amoxicillin and Cefixime, which are further used to make finished antibiotics. For up to two Indian companies that apply to make Penicillin, can receive an incentive each of ₹120 crore per year for up to four years, if they invest ₹750 crore each in a green field plant to manufacture at least 5000 metric tonnes of penicillin per year. Such incentives of between 10 to 20 per cent annually of the sales and investment have been charted out by the centre for 41 eligible products for 53 APIs. 

The meeting will be held under chairmanship of the Joint Secretary in the Department of Pharmaceuticals with CEOs of pharma companies, divided state-wise. In the first phase, Kerala, Karnataka, Tamil Nadu, Andhra Pradesh, Puducherry and Goa will be consulted, followed by Gujarat, Maharashtra, Madhya Pradesh, Dadra Nagar Haveli, Daman and Diu, Chhattisgarh, Odisha and Jharkhand.

In the third phase on the same day, pharma CEOs from Jammu and Kashmir, Arunachal Pradesh, Delhi, Haryana, Punjab, Rajasthan, Himachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Uttar Pradesh, Uttarakhand, West Bengal, Bihar and Chandigarh will be consulted.
Ashok Madan, Executive Director of Indian Drug Manufacturers’ Association said that it is a good initiative for industry on the way to self-sufficiency. Madan said, “It should however cover more fermentation products. Exports should also be included for incentive purposes.” Currently, incentives are only being given for domestic manufacturing and supply for KSMs and APIs in the Indian market. 

Madan also said that the scheme should be extended to brown field units. Currently, the guidelines demand that the pharma companies invest in setting up green field units that will produce these KSMs and APIs in order to be eligible for reimbursements in terms of incentives. 

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