Bulk drug parks’ promotion schemeApprox Read Time: 5 minutes
- The Union Cabinet has approved two new schemes to boost the domestic production of bulk drugs and medical devices and exports.
- These are:
- Promotion of Bulk Drug Parks Scheme for financing Common Infrastructure Facilities in 3 Bulk Drug Parks with financial implication of Rs. 3,000 crore for next five years.
- Production Linked Incentive (PLI) Scheme for promotion of domestic manufacturing of critical key starting materials or KSMs/Drug Intermediates and active pharmaceutical ingredient (API) with a financial assistance of Rs 6,940 crore for the next eight years.
Background: Need for the schemes
- The Indian pharmaceutical industry is the 3rd largest in the world by volume.
- Despite this achievement, India is significantly dependent on import of basic raw materials, viz., Bulk Drugs that are used to produce medicines.
- In some specific bulk drugs the import dependence is 80 to 100%.
- Continuous supply of drugs is necessary to ensure delivery of affordable healthcare to the citizens.
- Any disruption in supplies can have significant adverse impact on Drug Security, which is also linked to the overall economy of the country.
- Self-sufficiency in manufacturing of bulk drugs is highly required.
About: Promotion of Bulk Drug Parks Scheme
- Decision is to develop 3 mega Bulk Drug parks in India in partnership with States.
- Government of India will give Grants-in-Aid to States with a maximum limit of Rs. 1000 Crore per Bulk Drug Park.
- Parks will have common facilities such as solvent recovery plant, distillation plant, power & steam units, common effluent treatment plant etc.
- A sum of Rs. 3,000 crore has been approved for this scheme for next 5 years.
- The scheme is expected to reduce manufacturing cost of bulk drugs in the country and dependency on other countries for bulk drugs.
- The scheme will be implemented by State Implementing Agencies (SIA) to be set up by the respective State Governments and the target is to set up 3 mega Bulk Drug Parks.
About: Production Linked Incentive Scheme
- Financial incentive will be given to eligible manufacturers of identified 53 critical bulk drugs on their incremental sales over the base year (2019-20) for a period of 6 years.
- Out of 53 identified bulk drugs, 26 are fermentation based bulk drugs and 27 are chemical synthesis based bulk drugs.
- Rate of incentive will be 20% (of incremental sales value) for fermentation based bulk drugs and 10% for chemical synthesis based bulk drugs.
- A sum of Rs. 6,940 crore has been approved for next 8 years.
- The scheme intends to boost domestic manufacturing of critical KSMs/Drug Intermediates and APIs by attracting large investments in the sector to ensure their sustainable domestic supply and thereby reduce India’s import dependence on other countries for critical KSMs/Drug Intermediates and APIs.
- It will lead to expected incremental sales of Rs. 46,400 crore and significant additional employment generation over 8 years.
- The scheme will be implemented through a Project Management Agency (PMA) to be nominated by the Department of Pharmaceuticals.
- The Scheme will be applicable only for manufacturing of 53 identified critical bulk drugs (KSMs/Drug Intermediates and APIs).
- Common infrastructure facilities would be created with the financial assistance under the sub-scheme in 3 Bulk Drug Parks.
- It is expected to reduce manufacturing cost and dependency on other countries of Bulk Drug in the country.