Context: Recently, Cabinet approves Promotion of domestic manufacturing of critical Key Starting Materials/Drug Intermediates and Active Pharmaceutical Ingredients in the country.
Background

• The Indian pharmaceutical industry is the 3rd largest in the world by volume. However, despite this achievement, India is significantly dependent on import of basic raw materials, viz., Bulk Drugs that are used to produce medicines. In some specific bulk drugs the import dependence is 80 to 100%.
• Continuous supply of drugs is necessary to ensure delivery of affordable healthcare to the citizens. Any disruption in supplies can have significant adverse impact on Drug Security, which is also linked to the overall economy of the country. Self-sufficiency in manufacturing of bulk drugs is highly required.

Current Scenario
Recently, Union Cabinet approved the following schemes

• The scheme on Promotion of Bulk Drug Parks for financing Common Infrastructure Facilities in 3 Bulk Drug Parks with financial implication of Rs. 3,000 crore for next five years.
• Production Linked Incentive (PLI) Scheme for promotion of domestic manufacturing of critical KSMs/Drug Intermediates and APIs in the country with financial implications of Rs6,940 crore for next eight years.

About Promotion of Bulk Drug Parks

• Decision is to develop 3 mega Bulk Drug parks in India in partnership with States.
• Government of India will give Grants-in-Aid to States with a maximum limit of Rs. 1000 Crore per Bulk Drug Park.
• Parks will have common facilities such as solvent recovery plant, distillation plant, power & steam units, common effluent treatment plant etc.
• A sum of Rs. 3,000 crore has been approved for this scheme for next 5 years.

About Production Linked Incentive Scheme

• Financial incentive will be given to eligible manufacturers of identified 53 critical bulk drugs on their incremental sales over the base year (2019-20) for a period of 6 years.
• Out of 53 identified bulk drugs, 26 are fermentation based bulk drugs and 27 are chemical synthesis based bulk drugs.
• Rate of incentive will be 20 % (of incremental sales value) for fermentation based bulk drugs and 10% for chemical synthesis based bulk drugs.
• A sum of Rs. 6,940 crore has been approved for next 8 years.

Impact of this move

• The scheme is expected to reduce manufacturing cost of bulk drugs in the country and dependency on other countries for bulk drugs.
• The scheme intends to boost domestic manufacturing of critical KSMs/Drug Intermediates and APIs by attracting large investments in the sector to ensure their sustainable domestic supply and thereby reduce India's import dependence on other countries for critical KSMs/Drug Intermediates and APIs.
• It will lead to expected incremental sales ofRs. 46,400 crore and significant additional employment generation over 8 years.
• Implementation:

Implementation Authority

• For Promotion of Bulk Drug Parks: The scheme will be implemented by State Implementing Agencies (SIA) to be set up by the respective State Governments and the target is to set up 3 mega Bulk Drug Parks.
• For Production Linked Incentive Scheme: The scheme will be implemented through a Project Management Agency (PMA) to be nominated by the Department of Pharmaceuticals. The Scheme will be applicable only for manufacturing of 53 identified critical bulk drugs (KSMs/Drug Intermediates and APIs).

Benefits of this move

• Common infrastructure facilities would be created with the financial assistance under the sub-scheme in 03 Bulk Drug Parks.
• It is expected to reduce manufacturing cost and dependency on other countries of Bulk Drug in the country.