Second PLI scheme for Indian pharma; incentives worth $2.07 billion

In an attempt to change India’s image as a manufacturer and exporter of low-value drugs, the government on Wednesday announced yet another $2.07 billion production-linked incentive (PLI) scheme for promoting manufacture of high-value products in the pharmaceutical sector.

The Indian government believes the PLI scheme will make India's $40 billion pharmaceuticals industry globally competitive and less reliant on imports for high-end patented drugs.

 The new PLI scheme is expected to create 20,000 direct and 80,000 indirect jobs.

The allocations for the scheme are to be divided in three categories. Group A will have applicants having Global Manufacturing Revenue (FY 2019-20) of pharmaceutical goods of $690 million and above. Group B will be those having revenue of $69 million to $690 million, while Group C will comprise those companies having less than $69 million revenue.

Telecom Minister Ravi Shankar Prasad said allocations worth $1.51 billion have been earmarked for Group A, another $310 million for Group B, and $241 million for the relatively small players in Group C.

Scheme aims to boost production and create ‘global champions’

The objective of the scheme is to enhance India’s manufacturing capabilities by increasing investment and production in the sector and contributing to product diversification to high-value goods in the pharmaceutical sector. Another objective is to create global champions out of India who have the potential to grow in size and scale using cutting-edge technology and thereby penetrate global value chains, according to an official statement.

The PLI scheme is an effort to leverage India's position as a country which already exports low cost-pharma to more than 200 nations.

The government also hopes to boost innovation for development of complex and high-tech products including products of emerging therapies. The scheme is also expected to improve accessibility and affordability of medicines as well as orphan drugs to the Indian population.

The scheme will cover pharmaceutical goods under three categories, with the first one covering biopharmaceuticals, complex generic drugs, patented drugs or drugs nearing patent expiry, among others. The second category will cover active pharmaceutical ingredients and drug intermediates. The third category would feature repurposed drugs, auto immune drugs and anti-cancer drugs, among others, the government said in a notification.

India currently accounts for 3.5% of global pharma exports and this year, the value of Indian pharma exports is slated to touch $25 billion.

The PLI scheme will be implemented over eight years, beginning 2020-21, and is expected to benefit domestic manufacturers besides making available a wider range of affordable medicines to its populace.