Last Updated on December 31, 2023 by The Health Master
The Department of Pharmaceuticals (DoP) has issued a notice inviting applications from eligible companies to set up facilities under the production linked incentive (PLI) scheme for the promotion of domestic manufacturing of critical key starting materials (KSMs), drug intermediates (DIs) and active pharmaceutical ingredients (APIs) for the third time in the scheme.
The response from the industry has not been to the expectations in the past, as the fermentation-based bulk drug manufacturing needs more assurances and support from the government than what has been offered, including in terms of the cheaper imports from China.
While the plans were to approve applications for a total outlay of Rs. 6,940 crore, for the period of ten years from 2020-21, in two rounds it could only gather committed investment to the tune of around Rs. 4,500 crore.
The new notice is to select a maximum of 14 applicants to produce key fermentation based KSMs and DIs and fermentation based niche KSMs or DIs or APIs and four applicants for key chemical synthesis based KSMs or DIs.
This include slots to meet the shortfall in:
- Minimum annual production capacity of 1,600 MT of erythromycin thiocynate (TIOC) [maximum of two applicants to be selected]
- 1000 MT of 7-ACA [maximum of one applicant] under the Key Fermentation based KSMs or DIs,
- 160 MT of neomycin [two applicants],
- 80MT of gentamicin [two applicants],
- 200 MT of vitamin B1 [one applicant],
- 120 MT of clindamycin base [two applicants],
- 100 MT of streptomycin [two applicants]
- 400 MT of tetracycline [two applicants] under the fermentation based KSMs/DIs/APIs segment.
Under the key chemical synthesis based bulk drugs, slots are open for 32,000 MT of dicyndiamide (DCDA) [four applicants] and 3,200 MT of 2-MNI [four applicants] under the third round of selection.
Eligible applicants may apply online within 45 days from the issuance of the notice, said the notice issued on January 27, 2022.
While India has the third largest pharmaceutical industry in the world by volume, with a market presence in advanced economies such as the US and European Union, the country is significantly dependent on the import of basic raw materials, that is, bulk drugs that are used to produce medicines.
The government decided to launch the PLI scheme to attain self-reliance and reduce import dependence in these critical bulk drugs in 2020.
The PLI scheme is aimed at promoting domestic manufacturing of these bulk drugs by setting up greenfield plants with minimum domestic value addition in four different target segment (in two fermentation based – at least 90 per cent and in two chemical synthesis based – at least 70 per cent) for 41 products with a total outlay of Rs. 6,940 crore, for the period of 2020-21 to 2029-30.
The DoP has issued guidelines for the PLI scheme for these drugs in the country on October 29, 2020 and applications received in two rounds have already been appraised and selected.
For the initial round, the government has received 215 applications for the 36 products spread across the four target segments, out of which 42 applications were approved by the government with a total committed investment of Rs. 4,347.26 crore and an expected employment generation of around 8,792 persons.
A second round of applications was invited with the last date of submission as August 31, 2021 and a total of 24 applications were received.
The empowered committee on November 25, selected eight companies to set up plants with a committed investment of around Rs. 151.12 crore, and employment generation of around 1,951 persons. The commercial production of these plants are projected to commence from April 1, 2023 onwards.
The total applications approved under both rounds aggregate to 50 applicants with committed investment of Rs. 4,498.38 crore and employment generation of about 10,743 persons.
According to industry experts, the investment in fermentation-based products is much higher compared to chemical synthesis and hardly a dozen top Indian companies are capable enough to venture into manufacturing fermentation products.
There is also lack of technology, availability of uninterrupted power at lower rates and water supply, among others are required for the industry to take up such projects. The government has to interact with the industry and do the analysis or even consider joint ventures with fermentation-based companies internationally to bring in such capabilities to the country, they said.
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