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Home / Companies / News /  Centre issues rules for second PLI plan for pharma worth 15,000 cr

The government on Tuesday said it will offer as many as 55 drugmakers a total of 15,000 crore in production-linked incentives for six years through FY29 to boost manufacturing of medicines, in-vitro diagnostics and their raw materials in India.

The incentives, similar to cashbacks, would be given to the drugmakers as a proportion of incremental sales, over and above the revenue generated by the product in the financial year 2019-20.

The department of pharmaceuticals (DoP), which has formulated the scheme, has divided the products—which consist of formulations, biopharmaceuticals, bulk drugs and in-vitro diagnostic medical devices, among others—into three categories. The first and second categories would attract a 10% incentive on incremental sales, and the third category would attract a 5% incentive.

The government has allocated 11,000 crore for the first category, which includes biopharmaceuticals, complex generic drugs, patented drugs or drugs nearing patent expiry, gene therapy drugs, orphan drugs and plant-based pharmaceuticals, among others. It has set aside 2,250 crore for the second category, which includes bulk drugs that are not among the 41 products that were included in the first PLI scheme announced in July 2020.

The third category would get a total of 1,750 crore and would include repurposed drugs, auto-immune, anti-cancer drugs and anti-diabetic drugs, as well as medicines that are not made in India and in-vitro diagnostics.

A company that has made or plans to make investments on or after 1 April 2020 will be considered eligible for the scheme, the DoP said in its statement.

The DoP, through a selection committee, will choose a maximum of 55 applicants under the scheme, who will be allowed to apply for more than one product across any of the three categories through a single application, provided they meet the criteria for each category.

To be eligible, the company has to make investments worth anywhere between 50 lakh and 50 crore, depending on the category of the drug and the company’s financial capability. The investment includes the cost of new plant and machinery, equipment and associated utilities, research and development, transfer of technology, product registration and expenditure incurred on the building where the plant and machinery are installed.

The government’s announcement comes a day after it said four applicants in the first PLI scheme withdrew and was replaced by four other companies. The first scheme was aimed at boosting the production of 41 bulk drugs, for which India is heavily dependent on imports, especially from China.

Industry officials said that the withdrawal is a sign of the problems with the first scheme as instead of two or three participants for producing each bulk drug, the government panel has selected one for many bulk drugs in the first scheme.

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