Last Updated on August 25, 2023 by The Health Master
R&D Incentive Scheme
Download the R&D Incentive Scheme for the Pharma Industry, the link is given below: DoP 16-08-2023 PRIP – Scheme for Promotion of Research and Innovation in Pharma MedTech Sector
The Indian government has introduced a groundbreaking R&D Incentive Scheme, i.e., a research-linked-incentive (RLI) scheme worth Rs 5,000 crore, aimed at propelling the pharmaceutical and medical technology sectors forward.
This initiative is designed to enhance the research infrastructure within the country and foster stronger ties between industry and academia, thereby advancing research and development (R&D) endeavors.
Unveiling the Growth Vision
The Indian government envisions a significant growth trajectory for the domestic pharmaceutical industry, with the goal of increasing its global market share from the current 3.4% to an impressive 5% by 2030.
By leveraging the right growth catalysts, they aspire to position India as a formidable player in the global market.
Two Pillars of the Scheme
The scheme comprises two key components.
1. Centres of Excellence for Enhanced Research Infrastructure
The first facet centers around bolstering research infrastructure through the establishment of Centres of Excellence at the prestigious National Institute of Pharmaceutical Education and Research (NIPERs).
These Centers of Excellence will play a pivotal role in elevating research capabilities in the pharmaceutical and medical technology sectors.
They will provide state-of-the-art facilities for research activities, contributing to the nurturing of a skilled talent pool through close industry-academia collaboration.
In a gazette notification dated August 16, the Ministry of Chemicals and Fertilizers outlined that this aspect of the scheme will receive a funding allocation of Rs 700 crore over a span of five years.
2. Promotion of Research in Priority Areas
The second facet is dedicated to promoting research in six priority areas within the pharmaceutical and medical technology sectors.
These priority areas include.
- Development of new chemical, biological, or phytopharmaceutical (natural) entities.
- Complex generics.
- Precision medicine, focusing on innovative targeted therapeutics
- Medical devices
- Orphan drugs cater to rare diseases
- Drug development to combat antimicrobial resistance (AMR)
Within and across these categories, prioritization will be determined based on future potential, opportunities, and national significance.
Projected Investment and Recovery Mechanism
The scheme’s total budget allocation stands at Rs 5,000 crore over a five-year period, spanning from 2023–24 to 2027–28.
The funds disbursed for projects will be recuperated through benefit sharing, either in the form of royalty or equity.
The government reserves the option to levy a 10% royalty on the net sales of products or technologies until the patent’s effectiveness or acquisition of equity.
A Vision for Growth
The Indian pharmaceutical industry currently holds a 3.4% share in the global pharmaceutical market.
If the industry continues with a business-as-usual approach, its market value is projected to reach $108 billion by 2030, achieving an 11% Compound Annual Growth Rate (CAGR).
On a global scale, the pharmaceutical market is anticipated to expand to $3,206 billion by 2030.
With the right strategic focus, India has the potential to secure a 4% share of the global market, translating to a market size of $130 billion, and further, a 5% share amounting to a market size of $160 billion.
Turning the spotlight to the medical devices sector, India’s market size was approximately $11 billion (around Rs 90,000 crore) in 2020, comprising a 1.5% share of the global medical device market.
The sector has demonstrated a commendable Compound Annual Growth Rate (CAGR) of 10–12% over the past decade.
Uplifting the R&D Incentive Scheme
The Indian pharmaceutical industry has largely excelled in the domain of generic drugs, where it enjoys global leadership.
Despite this achievement, there is room for improvement in research and development endeavors.
The financial year 2021 saw the top 10 Indian pharmaceutical companies invest around 7.2% of their sales in R&D.
However, there is a recognized need to further augment R&D expenditures within the country to drive innovation and research forward.
Industry Perspective on R&D Incentive Scheme
Sudarshan Jain, Secretary General of the Indian Pharmaceutical Alliance (IPA), praised the initiative as a significant milestone in elevating the industry’s value chain and igniting innovation.
He emphasized that a synergistic approach encompassing funding, simplified regulations, and robust industry-academia collaboration would pave the way for a thriving R&D ecosystem in the nation.
By fostering advanced research infrastructure and prioritizing strategic research areas, the government aims to position India as a global R&D powerhouse, contributing to the growth of the economy and the improvement of healthcare technologies.
Disclaimer: This article contains information derived from the source mentioned below. Our team utilized an AI language model, to rewrite and present the news / article in a unique format.
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