Last Updated on March 13, 2021 by The Health Master
The Department of Pharmaceuticals (DoP) has notified new production linked incentive (PLI) scheme following approval by the Cabinet chaired by Prime Minister Narendra Modi for the pharma sector worth Rs. 15,000 crore.
The new PLI scheme is aimed to boost the existing brownfield API units in the country and will bring first priority to 20 molecules to be produced with scale thus beating Chinese imports.
The duration of the scheme would be from 2020-21 to 2028-29 and is expected to promote the production of high value products in the country and increase the value addition in exports.
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In an earlier move, the government had approved Rs. 6,940 crore for 53 bulk drugs towards making the industry self-reliant and discouraging sub-standard API imports.
The three categories which have been identified and included in the PLI scheme for pharma will boost biopharmaceuticals, complex generic drug, patented drugs or drugs nearing patent expiry, cell-based or gene therapy products, orphan drugs, special empty capsules, complex excipients, active pharmaceutical ingredients (APIs) / key starting materials (KSMs) and / drug intermediaries (Dls), repurposed drugs, auto-immune drugs, anti-cancer drugs, anti-diabetic drugs, anti-infective drugs, cardiovascular drugs, psychotropic drugs, anti-retroviral drugs, in-vitro diagnostic devices (IVDs) and phytopharmaceuticals.
As per the PLI scheme, manufacturers of pharmaceutical goods registered in India will be grouped based on their global manufacturing revenue (GMR) to ensure wider applicability of the scheme across the pharmaceutical industry and at the same time meet the objectives of the scheme.
The qualifying criteria for the three groups of applicants will be as follows-
Group A: Applicants having global manufacturing revenue (FY 2019-20) of pharmaceutical goods more than or equal to Rs 5,000 crore.
Group B: Applicants having global manufacturing revenue (FY 2019-20) of pharmaceutical goods between Rs 500 (inclusive) crore and Rs 5,000 crore.
Group C: Applicants having global manufacturing revenue (FY 2019-20) of pharmaceutical goods less than Rs. 500 crore. Within this group, a sub-group for MSME industry will be made given their specific challenges and circumstances.
The total quantum of incentive (inclusive of administrative expenditure) under the scheme is about Rs. 15,000 crore. The incentive allocation among the Target groups is as follows- Group A: Rs. 11,000 crore, Group B: Rs. 2,250 crore and Group C: Rs. 1,750 crore.
The rate of incentive on incremental sales (over base year) of pharmaceutical goods covered under Category 1 & 2 will be 10% for FY 2022-23 to FY 2025-26, 8% for 2026-27 and 6% for 2027-28. The rate of incentive on incremental sales (over base year) of for pharmaceutical goods covered under Category-3 will be 5% for FY 2022-23 to FY 2025-26, 4% for 2026-27 and 3% for 2027-28.
Financial Year 2019-20 shall be treated as the base year for computation of incremental sales of manufactured goods. The scheme shall cover pharmaceutical goods under three ategories:
Category 1 will cover bio-pharmaceuticals, complex generic drugs, patented drugs or drugs nearing patent expiry, cell based or gene therapy drugs, orphan drugs, special empty capsules like HPMC, pullulan, enteric etc, complex excipients, phyto-pharmaceuticals.
Category 2 will cover active pharmaceutical ingredients/key starting materials / drug intermediates and
Category 3 (Drugs not covered under Category 1 and Category 2) are Repurposed drugs, Auto immune drugs, anti-cancer drugs, anti-diabetic drugs, anti- infective drugs, cardiovascular drugs, psychotropic drugs and anti- retroviral drugs, In-vitro diagnostic devices, other drugs as approved and other drugs not manufactured in India.
The applicants will be selected based on pre-defined objective criteria to assess their experience, capacity to grow in scale and innovate. The selection criteria shall be elaborated in the scheme guidelines.