Vijay C Roy
Today News Online Service
Chandigarh, February 5
Though the Central government’s higher allocation to healthcare sector elated pharma industry, the wait for bulk drug parks aimed at reducing dependency on China is getting longer as the same was not announced in the Budget.
The government proposes to develop three bulk drug parks through grant-in-aid to states with a cap of Rs 1,000 crore per park with 70% financial assistance.
The government was supposed to announce the name of states selected for setting up the bulk drug parks by January 15. As the deadline passed, the drug makers were expecting the announcement in the Union Budget. The northern states such as Himachal Pradesh, Punjab and Haryana are in the fray besides over a dozen states to set up these parks.
“Under the Production Linked Incentive (PLI) scheme, the first tranche of key starting materials for large scale fermentation of four molecules has been declared. A lot of states are wooing investments and the investors are eagerly waiting for the allocation of these parks,” said Dinesh Dua, past chairman, Pharmaceuticals Export Promotion Council of India (Pharmexcil).
The four molecules include pencillin G, 7-ACA, erythromycin thiocyanate and clavulanic acid. At present, India is fully dependent on China for these molecules.
“We’re in a bind as the pharma parks offer a great opportunity to investors by not only providing PLI incentives but also reduction in capital expenditure and operational expenses besides providing another shield against Chinese aggression in future supply chain scenario. Since the commercial production is projected to commence from April 1, 2023, the government should announce the selected states soon,” he said.
In such parks, 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 six years. Out of 53 identified bulk drugs, 26 are fermentation-based drugs and 27 are chemical synthesis-based drugs. Also, the rate of incentive will be 20% (of incremental sales value) for fermentation-based drugs and 10% for chemical synthesis-based bulk drugs.
The Indian pharmaceutical industry is the third largest in the world by volume. However, India is significantly dependent on import of basic raw materials viz. bulk drugs that are used to produce medicines.