Eager to cull China reliance, India expands PLI drug scheme

Even as the Madras High court raises concern over India’s over-dependence on Chinese pharma ingredients, the Indian government has expanded and amended the Production-Linked Incentive (PLI) scheme aimed at strengthening India's indigenous production of active pharmaceutical ingredients (APIs).

Close on the heels of several complaints received by the Department of Pharmaceuticals claiming that the scheme was too restrictive, and the fact that APIs like emtricitabine and efavirenz for HIV/AIDS prevention and treatment are more than 25% and more than 16% cheaper, respectively, when sourced from China while bulk paracetamol is up to 25% cheaper, the central government decided to remove the criteria of 'minimum investment' and 'barring exports' in the PLI scheme.

The move is specifically geared to further encourage increased production of APIs required in the manufacture of medicines.

Benefit of minimum investment criteria

Ever since the PLI scheme was announced, several drug associations have pointed out the minimum investment criteria would not work in favor of the industry and would delay the aimed objective.

Drug association bodies pointed out there were no takers of fermentation-based products which are 14 in number, "because they need huge investments and there are very few fermentation-based pharma companies in India. But in the chemical synthesis category, out of 27 products, 20-21 products can be immediately manufactured by the industry. Large companies, as well as those with years of subject experience, have already shown interest in producing these items."

The government's consideration of removing the minimum investment criteria could give a breather to the industry, said officials, and also prove to be a huge setback to China because nearly 75% of the products in the chemical synthesis category could soon be started.

Nipun Jain, chairman, Small and Medium Pharma Manufacturers Association, said a letter was written to the joint secretary of Department of Pharmaceuticals to remove the minimum investment limit in the PLI scheme.

It was pointed out a minimum of $2.6 million investment embargo under the PLI scheme for chemical synthesis category restricted other manufacturers who could make minimum investment "considering they already have common surplus utilities available."

"Certain other products can also be made with backward integration which will require less than $2.6 million investment. They are diclofenac sodium, ofloxacin, levofloxacin, ornidazole, atorvastatin and losartan," he added.