PLI scheme: GMP is key for domestic APIs

This is a huge opportunity for the Indian pharma sector, and we need to exploit the same with the right strategy.

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Medicines
Picture: Pixabay

Last Updated on December 13, 2020 by The Health Master

The department of pharmaceuticals (DoP) under the Ministry of Chemicals and Fertilizers last week said in a press statement that the production-linked incentive (PLI) scheme for bulk drugs has shown a very positive response from the industry whereby 215 applications made by 83 pharmaceutical manufacturers were received.

When speaks to Arvind Sharma, Partner, Shardul Amarchand Mangaldas & Co, to know his perspective on the crucial aspects in strengthening domestic API manufacturing and how the Modi government’s PLI scheme could impact the industry.

Q. How has the C-19 pandemic brought in changes in the pharma industry?
Arvind: We are witnessing a tectonic shift, and accelerated growth in the pharma sector. Global demand for pharmaceutical products has drastically gone up, and there is a lot of path breaking innovation happening in the healthcare and life sciences sector. The market for pharmaceutical products is also changing, as people are now amenable to, and are also opting for generic drugs.

The global disruption caused by the C-19 pandemic has led people to think of several alternates, including an alternate to China which is a global manufacturing hub for pharmaceutical products, and raw materials including APIs and KSM.

This is a huge opportunity for the Indian pharma sector, and we need to exploit the same with the right strategy. The pharma sector needs to enhance its manufacturing capabilities, exploit technology, put artificial intelligence to extensive use and extensively practice good manufacturing practices.


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Q. What are the crucial measures in scaling up domestic API manufacturing?
Arvind: The Government of India (GOI) has introduced schemes for promotion of domestic manufacturing of critical raw materials and APIs such as bulk drug parks and production linked incentive scheme (PLI Scheme) with a financial implications of INR 10,000 crores. The GOI has recently tweaked the PLI scheme allowing more API products to be eligible for incentives.

While the framework has been established, any ground level hurdles faced by the industries need to be tackled in a timely manner. For this purpose, the regulatory framework needs to be user-friendly, and best-in-class infrastructure facilities including R&D eco-system and testing laboratories, need to be provided. Needless to mention, adequate supply of raw materials and skilled materials need to be ensured. We need to have a holistic approach to develop this sector.

Q. Do you see price competitiveness becoming a bottleneck for domestic APIs?
Arvind: The GOI has, amongst others, come up with reforms to address supply-chain disruption risks in the API segment. These reforms will go a long way in ensuring that Indian drug makers procure sufficient funding and they are able to market their products at competitive prices.

Healthy competition in any sector will ensure growth and benefit all stakeholders, including the ultimate customer. Competition will only have a positive impact.

Q. What are your expectations from the PLI scheme?
Arvind: The PLI Scheme will result in strengthening of the manufacturing sector, generate employment opportunities, and reduce the forex outflow owing to import of raw materials. Since this is an incentive mechanism, it will have a direct impact on the revenue and profitability of various stakeholders, and this should make investments attractive.

The stage is set to boost domestic manufacturing of APIs, and I think we are already at a good starting point.


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