NITI Aayog plans Rs 3,000-cr scheme to boost APIs industry

Hit by coronavirus crisis, NITI Aayog plans Rs 3,000-cr scheme to boost bulk drugs industry

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Pharma Industry Factory, unit, medicine drug API
Picture: Pixabay
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New Delhi: Government think tank NITI Aayog has proposed to build a corpus of Rs 3,000 crore for an incentive scheme to boost domestic manufacture of raw materials for medicines in the wake of the coronavirus outbreak that has hit supplies from China, ThePrint has learnt.

During a meeting convened by the Indian Council of Medical Research (ICMR), NITI Aayog officials they were planning “incentive scheme with a corpus of Rs 3,000 crore”, along with the Department of Pharmaceuticals, to revive domestic manufacturing of bulk drugs (active pharmaceutical ingredients or APIs), a senior official who was part of the meet told ThePrint.

API or bulk drugs are chemical compounds that are the most important raw materials to produce a finished medicine. While India is one of the leading suppliers of drugs to many countries, drug makers here import around 70 per cent of their total bulk drug requirements from China.

“The NITI Aayog also informed officials that under the scheme, the government will invest 25 per cent of the project cost on an investment of minimum Rs 500 crore,” the official added.

The proposal will now be sent for the Cabinet’s approval.

Led by Director General of ICMR, Dr Balram Bhargava meeting was attended by industry representatives and government official across ministries, including Shubhra Singh, chairman, National Pharmaceuticals Pricing Authority (NPPA) and Dinesh Abrol, former chief scientist at the Council of Scientific and Industrial Research.

Also read: No shortage of drugs due to coronavirus: Eli Lilly

The government’s move comes amid concerns over shortages of chemical ingredients for essential medicines, including some commonly-used antibiotics and vitamin pills due to disruption in supply chain of imported APIs and key starting materials from coronavirus-hit China.

To prevent shortages of medicines, the government has also placed restrictions on the export of 13 APIs and formulations made from them, including the common antibiotic Metronidazole, fever reducer Paracetamol and a variety of vitamin pills.

SMEs may not benefit

At the meeting, drug-makers told government officials that the scheme will only provide incentive to large enterprises, not small and medium-sized enterprises (SMEs).

“…the majority of API units in India are run by medium enterprises who may not be able to invest even half of Rs 500 crore,” said an industry representative who was part of the meeting.

“The medium-sized firms — where API units are still functional but only to around 40 per cent of their total capacity — are the ones that can immediately boost production and help India combat the shortages caused by Chinese imports,” he added.

Cipla, Abbott reach out to government for ‘airlifts’

The central government has also planned to help the country’s fourth-largest drug-maker Cipla and US pharma giant Abbott in airlifting their raw materials from coronavirus-hit China in the coming days.

Both the firms had reached out to the government after a committee — led by joint drugs controller Eswara Reddy, one of India’s top regulators in the sector — had asked drug-makers across India to inform the government if they required urgent “pick-ups” from China.

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