Local Pharma API companies to gain from Rs 10,000 crore scheme

New Delhi: The government will provide an incentive of Rs 10 crore each to domestic companies setting up plants to produce 53 crucial active pharmaceutical ingredients (APIs) for which the domestic drug industry is vulnerably dependent on imports from China. The incentive — part of a Rs 10,000-crore production-linked incentive scheme to boost domestic manufacturing of critical bulk drugs and APIs approved by the Cabinet in March — will be given to companies investing on greenfield plants to manufacture 53 crucial APIs of anti-TB drugs, steroids, vitamins, etc, with the rider that they must supply to domestic drug makers. “The scheme is applicable for domestic consumption only,” a government official told ET on condition of anonymity. The scheme also proposes annual incentive of Rs 720 crore for crucial fermentation products including penicillin G (used to manufacture antibiotics), amino cephalosporanic acid 7-ACA (used in manufacturing antimicrobial drugs), clavulanic acid (to treat bacterial infections), and erythromycin thiocynate (antiinfectives), said the official .Indian pharmaceuticals industry is the third largest in the world, but it is dependent on China for crucial raw material. The new scheme seeks to reduce this dependency and ensure adequate domestic supply of bulk drugs and APIs. Contours of the scheme were discussed with the stakeholders by a technical committee formed by the pharmaceuticals department (DoP) last month. For speedy introduction of the scheme, the government proposes to disburse funds within 60 days of receipt of claim, according to the technical panel’s proposal. Firms whose cost of production is comparable or less than import price of APIs and bulk drugs will get priority, it said. ET has seen a copy of the proposal.“If no investment has been made by the manufacturer within six months from date of approval, the bank guarantee shall be forfeited and the manufacturer shall no longer remain a beneficiary under the scheme,” said the official cited earlier. The government has also proposed creation of two bulk drug parks and one intermediate park with investment incentive of up to Rs 1,000 crore each.

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