The government has notified the production linked incentive (PLI) scheme for promotion of domestic manufacturing of critical key starting materials (drug intermediates) and active pharmaceutical ingredients (bulk drugs) in India. The scheme, open for four months from June 2, will allow investors to propose establishment of greenfield facilities for any of the 53 key drug intermediates and bulk drugs that are hardly manufactured in India today. The list includes key ingredients that go into the manufacturing of commonly prescribed medicines like paracetamol, aspirin, metformin, atorvastatin etc.
Bulk of the imports of these drug intermediates and bulk drugs are from China. The government strategy is expected to reduce dependence on China and be self reliant on the production of live saving and critical medicines throughout its production chain.
For fermentation-based eligible products, the scheme provides 20 percent of the annual incremental sales of these products for the first four years. For the fifth and sixth year, the incentive will be 15 percent and 5 percent respectively. For products that are chemically synthesised, it will be 10 percent incentive on the incremental sales for the first five years. The government proposes to spend a total of Rs 6,940 crore as incentive during the tenure of the scheme.
The notification on June 2 by the department of pharmaceuticals also specifies that the eligibility for the incentive scheme will depend on companies’ threshold investment to set up the greenfield manufacturing unit. Functional guidelines for the operationalisation of the scheme is to be issued by the department soon.
Reference: Business Today