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Increase in local drug production as the government plans Rs. 15,000 crore PLI Scheme

Increase in local drug production as the government plans Rs. 15,000 crore PLI Scheme

The government is working on a Rs. 15,000-crore production linked incentive (PLI) scheme for the pharmaceutical industry, a senior official told ET. The scheme intends to promote indigenous manufacture of complex generics, biosimilars and high value-add medicines, to boost domestic drug production and cut dependence on costly imports.

The proposal will help India become self-reliant, both in the production of active pharmaceutical ingredients — the basic raw material for making drugs — and complex formulations, according to industry experts. The proposal by the department of pharmaceuticals, which is likely to go before the Union Cabinet for approval soon, will give financial incentives to eligible manufacturers on the sale of complex generic drugs and biopharmaceuticals.

“A PLI scheme is in works and is aimed at giving impetus to the pharma industry,” the government official said, adding that an incentive of 5%-10% on sale value will be provided for the complex biologicals and other pharmaceuticals.

“The proposed scheme will give a thrust to the pharma industry in the country, especially in complex formulations, and will help the sector regain dominance,” said a pharma industry expert on condition of anonymity. India has a 20% share of the global generics market. However, the country is highly dependent on developed countries such as the United States, Germany, Sweden, Switzerland and the UK for import of finished formulations.

“Given the right implementation, India can aspire to be self-reliant in APIs/KSMs (key starting materials) and complex generics, for which it is largely dependent on other countries,” another industry expert said. Others, however, said the scheme will only benefit large enterprises.

“While the scheme will elicit good response from the large pharma players, the medium and small companies will not be eligible to avail of the scheme,” said a third sector expert who did not wish to be named.|

The department of pharmaceuticals had earlier this year rolled out a PLI scheme to make India self-sufficient in the production of 53 critical APIs or KSMs, and to manufacture medical devices. The Indian pharmaceutical industry is the third largest in the world but is dependent on China for crucial raw material.

The earlier scheme sought to reduce this dependency by ensuring adequate domestic supply of bulk drugs and APIs.

Reference: Economic Times

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