Pharma PLI scheme: 29 Cos applied so far to take benefits

29 pharma companies have submitted their applications to the government and many more are soon likely to sign up.

Medicine Tablet
Picture: Pixabay

The initial response to the four schemes launched by the Department of Pharmaceuticals (DoP) for promoting domestic manufacturing of drugs, APIs/ KSMs and medical devices is quite encouraging.

CNBC-TV18 has learnt from top sources at the DoP that as many as 29 pharma companies have submitted their applications to the government and many more are soon likely to sign up.

Launched in July, the proposal was to push domestic manufacturing of active pharmaceutical ingredients (API) and reduce dependence on imports, this alone was aimed to provide Rs 6,940-crore production linked incentives to domestic drug manufacturers.

Apart from this, when it comes to the other two schemes launched along with the PLI, that is — incentive schemes aimed at boosting domestic medical manufacturing and establishing bulk drug parks, sources added that as many as four states have already signed up for these two schemes each and more have sought time from the government to submit their applications.

“4 states have applied to the Pharma Department for setting up Medical Device Parks, these are — Uttarakhand, Tamil Nadu, J&K, Chattisgarh. For setting up Bulk Drug Manufacturing Parks also, 4 states have applied so far, including — Karnataka, Tamil Nadu, Rajasthan. Here too, like PLI, states have sought more time to apply as they are studying the contours of the schemes,” sources added.

Also read: 2/3rd of APIs for generic drugs produced in India & China:…

The last date for application for Pharma PLI, Drug & Medical Device Parks is October 15. This has already been revised once as the initial deadline was 24 September.

The industry and states have pitched for another extension due as Covid-19 pandemic disruptions are leading to delays.

Scheme For Domestic Manufacturing of Active Pharmaceutical Ingredients (APIs)

Under this scheme, around 53 active pharmaceutical ingredients (APIs) — covering 41 products — have been identified by the government, for which companies will be eligible for financial incentives, provided they set up indigenous greenfield manufacturing. The financial incentives will be provided for six years.

For fermentation-based products, the incentive for FY 2023-24 to FY 2026-27 would be 20 percent, incentive for 2027-28 would be 15 percent and incentive for 2028-29 would be 5 percent.

For chemical synthesis based products, the incentive for FY 2022-23 to FY 2027-28 would be 10 percent.

Scheme For Promoting Domestic Manufacturing of Medical Devices

The government also notified a Rs 1,800 crore Production Linked Incentive Scheme for promoting domestic manufacturing of medical devices.

Noting that domestic medical devices market in India is heavily dependent on imports which contribute to more than 85 percent of the market, the scheme intends to boost domestic manufacturing and attract large investments.

Under the scheme, financial incentive shall be given to selected companies at the rate of 5 percent of incremental sales (over Base Year) of goods manufactured in India and covered under Target segments, for a period of five (5) years i.e. from FY 2021-22 to FY 2025-26.

Support under the scheme shall be provided for a period of five (5) years i.e. from FY 2021-22 to FY 2025-26.

Also read: Gist of Notification 25th September 2020: Medical Oxygen

The manufacturers of following medical devices are eligible under the Scheme

1. Cancer care / Radiotherapy medical devices

2. Radiology & Imaging medical devices (both ionizing & non-ionizing radiation products) and Nuclear Imaging Devices

3. Anaesthetics & Cardio-Respiratory medical devices including Catheters of Cardio-Respiratory Category & Renal Care Medical Devices

4. All Implants including implantable electronic devices like Cochlear Implants and Pacemakers

Scheme For Promoting Bulk Drug parks:

The government also notified a scheme to promote bulk drug parks. For selected parks, financial assistance to the tune of 70 per cent of the project cost of common infrastructure facilities will be provided. In the case of Northeast states and hilly states (Himachal Pradesh, Uttarakhand, Union Territory of Jammu & Kashmir, and Union Territory of Ladakh), financial assistance will be 90 percent of the project cost.The maximum assistance under the scheme for one bulk drug park will be limited to Rs 1,000 crore. The total financial outlay of the scheme is Rs 3,000 crore.

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