NEW DELHI: The Cabinet on Saturday approved the relaunch of a scheme to set up three bulk drug parks and four medical device parks for a total outlay of ₹3,400 crore over five years. This comes amid the coronavirus epidemic that hit supply of crucial pharmaceutical raw materials from China.
Under the bulk drug park scheme, the government will give grants-in-aid to states with a maximum limit of ₹1,000 crore per bulk drug park, effectively up to ₹3,000 crore in total, minister of state for chemicals and fertilisers Mansukh Mandaviya said on Saturday.
The parks will have common facilities such as solvent recovery plant, distillation plant, power & steam units, and common effluent treatment plant.
A similar scheme has been announced for medical devices, with the Centre providing a maximum grant-in aid of ₹100 crore per park.
The government also announced a production-linked incentive scheme to promote domestic manufacturing of critical key starting materials (KSMs), drug intermediates and active pharmaceutical ingredients (APIs) in the country. The PLI scheme would have a financial implication of ₹6,940 crore to the government for next eight years.
Under the PLI scheme, manufacturers will be given a 20% incentive on incremental sales of of 53 identified critical bulk drugs, 26 fermentation-based bulk drugs and 27 chemical synthesis-based bulk drugs, Mandaviya said. Domestic pharmaceutical manufacturers almost completely depend on Cchina for both these types of bulk drugs.
The PLI scheme will be implemented through a project management agency (PMA) nominated by the Department of Pharmaceuticals.
Becoming self reliant in supply of raw materials has been a critical issue for pharmaceutical companies and the government over the last five years, but not much was done so far. The issue gains significance after the novel coronavirus epidemic shut down factories in China, which in turn hit supplies of raw materials.
China supplies around two-thirds of India’s pharmaceutical raw materials, and in certain segments like antibiotics, the proportion is as high as 90%.
Bulk drug and medical devices park schemes are not new and were first suggested in February 2015 by a committee headed by V.M. Katoch, the then secretary of department of health research.
The committee had suggested setting up of six bulk drug parks, which was announced by the government later that year along with medical device parks.
The plan was shelved a couple of years later due to lack of interest by pharmaceutical companies.
On Tuesday, chemicals minister D.V. Sadananda Gowda had told Lok Sabha that the DoP had given in-principal approval for such common facilities at Andhra Pradesh, Telangana and Himachal Pradesh.