Last Updated on July 8, 2021 by The Health Master
The Department of Pharmaceuticals (DoP) has re-invited applications from eligible applicants to manufacture fermentation based key starting material/drug intermediate erythromycin thiocyanate under the production linked incentive (PLI) scheme for promotion of domestic manufacturing of 41 KSMs/DIs/APIs.
Earlier Hyderabad-based Aurobindo Pharma was selected as the only company to manufacture erythromycin thiocyanate, which is used for manufacturing anti-infective drugs. Aurobindo committed production capacity of 1,600 metric tonnes at a committed investment of Rs. 834 crore.
The selection of one manufacturer implicates that the entire incentive for erythromycin thiocyanate will go to just one drug maker as it will be eligible for 20 per cent incentive from the government on the incremental sales of the product under the PLI scheme. This will drive other manufacturers of erythromycin thiocyanate away from the market. As a result, all drug firms will depend on just one drug maker for the product.
On April 16, 2021, Indian Drug Manufacturers’ Association (IDMA) in a letter to DoP secretary S Aparna had expressed concern over selection of one manufacturer for one molecule under the PLI scheme which would create a monopoly situation. This would make the drugs expensive in the hands of the patient, stated IDMA.
Subsequently, DoP has started re-inviting applications from eligible applicants for manufacturing KSMs/DIs/APIs, wherein just one drug firm received approval to manufacture the molecule.
On June 14, 2021, it had invited applications from eligible applicants to manufacture chemical synthesis based KSMs/drug intermediates (DIs) like cyclohexane diacetic acid (CDA) and other chemical synthesis based KSMs/drug Intermediates/APIs like artesunate under the PLI scheme.
Similarly, on July 2, 2021 it invited fresh applications from eligible applicants to manufacture erythromycin thiocyanate. As per the PLI scheme guidelines, two applicants will be selected for manufacturing erythromycin thiocyanate with a minimum annual production capacity of 800 metric tonnes.
Erythromycin thiocyanate is among the four raw-materials under the priority ‘category I’ of the PLI scheme in which the country is presently fully import-dependent. The other three raw-materials under category I include penicillin G; 7-ACA and clavulanic acid.
The PLI scheme launched by the government in July 2020 provides incentive to boost the domestic production of 41 critical APIs, DIs and KSMs, falling in four categories that are required for manufacturing drugs in the country. The total outlay of the scheme is Rs. 6,940 crore for the period 2020-21 to 2029-30.
According to the PLI scheme guidelines on July 27, 2020, threshold investment was Rs. 400 crore for four fermentation based products under category I and Rs. 50 crore for ten fermentation based products under category II. Similarly, threshold investment was Rs. 50 crore for four chemically synthesised products under category III, and Rs. 20 crore for 23 chemically synthesised products under category IV.
So far, DoP has granted approvals to 16 firms to manufacture drugs under the PLI scheme to incentivise domestic pharmaceutical sector. In total, 215 applications were received until February 2021 under the PLI scheme for the 36 products spread across the 4 target segments.