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Cabinet: Bulk drug parks’ promotion scheme

Bulk drug parks’ promotion scheme

Approx Read Time: 5 minutes
Bulk drug parks’ promotion scheme

In News:

  • The Union Cabinet has approved two new schemes to boost the domestic production of bulk drugs and medical devices and exports.
  • These are:
    1. 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.
    2. 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.

Impact:

  • The scheme is expected to reduce manufacturing cost of bulk drugs in the country and dependency on other countries for bulk drugs.

Implementation:

  • 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.

Impact:

  • 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.

Implementation:

  • 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).

Benefits:

  • 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.

Also Read: How governments are helping citizens?

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