New Delhi: The Union cabinet Friday cleared a policy that is likely to provide a Rs 15,000 crore boost to domestic manufacturing of bulk drugs and medical devices. Bulk drugs, also known as active pharmaceutical ingredients (APIs), are the essential raw materials required to make medicines. For instance, paracetamol is a bulk drug in Crocin tablet.
The policy was necessitated by the impact of the coronavirus pandemic on supply chains, especially in China, which has been India’s primary bulk drugs supplier. It comes as immediate fears of an API shortage have been eased with the resumption of supplies from China, and seeks to make India self-reliant in the long run.
While the government hasn’t announced details of the policy yet, official sources said “the policy allocates around Rs 15,000 crore to boost the drugs and medical device sector of India”. “Around Rs 15,000 crore have been allocated to boost the pharma and devices industry. The majority of funds will be allocated to bulk drug manufacturing whereas medical devices capture the remaining budget,” a government official said.
“The policy includes all major recommendations submitted by the high-level committee formed by the Modi government in February,” the official added. The committee is led by Dr Eswara Reddy, joint drug controller at the medicines and devices watchdog Central Drug Standards Control Organisation (CDSCO).
It was formed to monitor the position of bulk drugs in India in light of the coronavirus outbreak in China, which bore the brunt of the pandemic before its epicentre moved to Europe.
Despite being the leading supplier of high-quality medicines across the globe, the Indian pharmaceutical industry is heavily dependent on China for the ingredients used to make even basic drugs such as the over-the-counter painkiller, Crocin.
The coronavirus outbreak in China stoked fears of a shortage of essential drugs, including common antibiotics and vitamins, in India.
The country imports as much as 70 per cent of bulk drugs, key starting materials and intermediates from China. According to government figures, the country’s drugmakers imported Chinese bulk drugs and intermediates worth $2.4 billion in 2018-19.
One of the suggestions of the committee was to boost local manufacturing to make India self-reliant. The committee had suggested setting up a ‘Drug Security Authority (DSA)’ under the Department of Pharmaceuticals, which is overseen by the Ministry of Chemicals and Fertilisers, to meet this objective.
“The government should establish the DSA not only to make India self-sufficient but also to become a global leader in manufacturing of APIs, key starting materials, intermediate and chemicals for domestic as well as export,” the committee had stated in its report, which was submitted on 27 February and accessed by ThePrint.
Special incentives likely
According to the aforementioned official, the policy includes the panel’s recommendation that “special incentives” be provided to the first five manufacturers who express interest in establishing units to churn out raw materials, in order to lend an initial impetus to the project.
Since the industry requires considerable investment and infrastructure, the scheme may also declare it an “infrastructure industry to provide facility of easy finance”, the official said.
The central government is likely to propose viability gap funding assistance — grants for endeavours that may not be immediately financially viable — for private manufacturers, and impose riders that will require them to generate jobs and boost exports, the official added.