Tuesday, July 28, 2020

Four schemes launched for promotion of domestic manufacturing of bulk drugs and medical devices parks in India

DV Sadananda Gowda ,Union Minister for Chemicals and Fertilizers launched four schemes of  Department of Pharmaceuticals for promotion of domestic manufacturing of bulk drugs and medical devices parks in India on July 27,2020.
The government has released guidelines for four schemes to boost domestic manufacturing of bulk drugs and medical devices on July 27 ,2020.

Aim:-
To reduce dependency on import and to make India self-reliant in manufacturing pharmaceuticals raw materials such as drug intermediates, Active Pharmaceutical Ingredients (APIs) ,medical devices, Key Starting Materials (KSMs).


DV Sadananda Gowda said on occasion that this in line with the the vision of Prime Minister Shri Narendra Modi, and his clarion call for making India Atma Nirbhar in pharma sector. For this the Government of India has approved four schemes, two each for Bulk Drugs and Medical Devices parks.He urged the industry and the States to come forward and participate in these schemes.

He said , India is often referred to as ‘the pharmacy of the world’ and this has been proved true especially in the ongoing Covid-19 pandemic when India continued to export critical life saving medicines to needy countries even during the countrywide lockdown. However, despite these achievements, it is a matter of concern that our country is critically dependent on imports for basic raw materials, viz. Bulk Drugs (Key Starting Materials (KSMs)/ Drug Intermediates (DIs) and Active Pharmaceutical Ingredients (APIs)) that are used to produce some of the essential medicines. Similarly in medical devices sector, our country is dependent on imports for 86% of its requirements of medical devices. 

Schemes are as follows:-
1.Production Linked Incentive (PLI) Scheme for promoting domestic manufacturing of Medical Devices .

2. Production Linked Incentive (PLI) Scheme for promotion of domestic manufacturing of critical Key Starting Materials (KSMs) I Drug Intermediates (Dis) I Active Pharmaceutical Ingredients (APIs) in India.

3.Scheme for promotion of Bulk Drug Parks.

4.Scheme for promotion of Medical Devices Parks.

Salient features of the above four schemes are:-
1.Scheme is open for applications for a period of 120 days from the date of issuance of guidelines and the approval will be given to the selected applicants within 90 days from the closure of application window. Applications will be received only through an online portal. The total financial outlay of the scheme is Rs. 6,940 crore.

2.Scheme for promotion of Bulk Drug Parks foresee creation of 3 bulk drug parks in the country. The grant-in-aid will be 90% of the project cost in case of North-East and hilly States and 70% in case of other States. Maximum grant-in-aid for one bulk drug park is limited to Rs.1000 crore. States will be selected through a challenge method. The States interested in setting up the parks will have to ensure assured 24*7 supply of electricity and water to the bulk drug units located in the park and offer competitive land lease rates to bulk drug units in the park. The location of proposed park from environmental angle and logistics angle would be taken into account while selecting the States. The States getting top 3 ranks will be selected.The creation of a centre of excellence is also envisaged to enable an ecosystem for Research and Development. The total financial outlay of the scheme is Rs. 3,000 crore.

3.Production Linked Incentive (PLI) scheme for promoting domestic manufacturing of Medical Devices: It intends to boost domestic manufacturing of medical devices in four target segments by giving financial incentives on sales to a maximum number of 28 selected applicants for a period of 5 years. Financial incentive will be given at a rate of 5% of the sales of domestically manufactured medical devices. The incentives would be subject to annual ceilings communicated in the approval letter the incentives would be available from FY 2021-22. 
Four target segments are:-
A. Cancer care / Radiotherapy medical devices
B. Radiology & Imaging medical devices (both ionizing & non-ionizing   radiation products) and Nuclear Imaging devices
C. Anesthetics& Cardio-Respiratory medical devices including catheters of Cardio Respiratory Category & Renal Care medical devices
D. AII Implants including implantable electronic devices
The total financial outlay of the scheme is Rs.3,420 crore. 

Other points of schemes are:-
1.Production Linked Incentive (PLI) schemes for promoting domestic manufacturing of  DIs and APIs, KSMs and medical devices will boost domestic manufacturing of 53 bulk drugs, on which India is critically dependent on imports. 

2.List of 41 products contained in the scheme guidelines will enable production of 53 bulk drugs in India.

3. A maximum of 136 manufacturers selected under the scheme will be given financial incentive as a fixed percentage of their domestic sales of these 41 products manufactured locally with required level of domestic value addition. 

4.The incentives would be subject to annual ceilings as communicated in the approval letter. 

5.Period for which incentive will be given - 6 years.

6.Rate of incentives -
  A.For fermentation based product - 20% for first four years, 15% for the fifth year and 5% for the  sixth year.
     B.For chemically synthesised products-  10% for all six years

7.Selected manufacturers shall have to complete committed investment above a threshold investment mandated for each product and achieve a prescribed minimum installed capacity before they are eligible to receive incentives. Threshold investment is Rs 400 crore for four fermentation based products and Rs 50 crore for ten fermentation based products. Similarly, threshold investment is Rs 50 crore for four chemically synthesised products, and Rs 20 crore for 23 chemically synthesised products.

8.The incentives for fermentation based products would be available from financial year 2023-24.
   For chemically synthesised products the incentives would be available from FY 2022-23.

Ref:- PIB

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