Department of pharmaceuticals doubles financial incentives for drug makers to their upgrade plants

New Delhi: The department of pharmaceuticals has doubled the financial incentive to ₹2 crore for drug manufacturers to upgrade their facility.

The financial incentive cap for modernizing units in keeping with Indian attempts to sync with global good manufacturing practices has been upped from ₹1 crore to a maximum of ₹2 crore for plants, based on their annual revenue.

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In 2022, the department of the pharmaceuticals notified the guidelines for the scheme Strengthening of Pharmaceuticals Industry (SPI) and introduced a sub-scheme called Revamped Pharmaceutical Technology Upgradation Assistance Scheme (RPTUAS) in January this year.

“Pursuant to the deliberations held with the industry representatives and after examination of the representations received in this regard, the sub-scheme RPTUAS has been further modified,” stated the department’s communication to Small Industries Development Bank of India (SIDBI).

Revised eligibility

As per the latest modification, pharmaceutical units with an average revenue of ₹1crore to less than ₹50 crore will get paid 20% of investments. Firms with a revenue of ₹50 crore to less than ₹250 crore are eligible to 15% of investment while those with revenue of ₹250 crore to less than ₹500 crore are eligible for 10% of investment.

The expenditure incurred on items such as Utilities, Clean Room Facility, Testing Lab, Stability Chamber, Effluent treatment/Waste Management, Production Equipment, Production Equipment, Consultation/Certification Expenses and any other item with the recommendation of the Technical Committee-- will only be considered for calculation of subsidy amount to the Pharma units.

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The subsidy amount for each applicant will be considered and released by the department’s Scheme Steering Committee (SSC) which provides coordination, policy, and management support for various schemes.

The first round of installment, 50% of the eligible amount i.e. Rs. 1.00 crore will be released within 30 days of obtaining requisite documents. While the 2nd and final installment of the subsidy (subject to total upper limit of Rs. 2 crore for each applicant) which the remaining amount will be released 2nd and within 30 days of obtaining the requisite documents post approval.

Industry welcomes support

Harish Jain, President, Federation of Organizations of Pharmaceutical Entrepreneurs (FOPE), an association of MSME drug firms, “We had a meeting with the department of pharmaceutical sometime back and we raised our issues that the subsidy amount of ₹1 crore was less. To upgrade the facility according to the Schedule M, GMP guidelines, a manufacture has to invest around ₹10 crore. However, our demand has been considered and subsidy amount has been double to ₹2 crore. Our association is welcoming the support of the government.”

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He added around 100 plus our member companies are likely to participate in the government scheme. “But upgrading the plants with advanced facilities require more time and our deadline of one year is going to end by December. So we are urging the government to extend the deadline for few more months,” Jain said.

WHO recommended standards

Last year in December, the Centre notified revised Schedule M, under the Drugs and Cosmetic Act, 1940, which makes it compulsory for all the pharmaceutical companies to follow WHO recommended GMP standards.

According to the notification, pharma companies with annual revenues of Rs250 crore and above were to compulsorily follow GMP within six months, while those with revenues of less than Rs250 crore had 12 months to do so.

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The move comes after a string of Indian-made drugs in regions as far afield as North America, Africa and Central Asia were found to be toxic, causing fatalities and raising questions about Indian pharma exports.

Queries sent to the department of pharma spokesperson remained unanswered.