Govt likely to announce short term incentive scheme, excipient makers may get benefit

The Department of Pharmaceuticals (DoP) is in the process of formulating a short term incentive scheme for the industry. It is likely that the government will announce the proposed scheme shortly.

The proposed initiative comes on the wake of appeals by industry stakeholders who appreciated the production linked incentive (PLI) scheme but also requested a short term incentive scheme which can remain active until PLI scheme starts yielding results.

Seemingly, the government has heeded these requests and given consent to formulate a short term incentive scheme which will help the industry to reduce its dependency on other countries.

In the recently held virtual technical session organised by the PHD Chamber of Commerce, Dr Eswara Reddy, Joint Drug Controller General of India informed that based on the industry’s recommendations, consideration might be given to existing facilities which have the capabilities as well as capacity to manufacture listed APIs, DIs and KSMs in the PLI scheme. The government is looking at formulating an alternate scheme for a short term period. DoP officials are in the process of formulating the scheme guidelines which is likely to be announced shortly.

He also added that authorities are also looking into identifying excipients which can also be part of the proposed scheme. The objective is that the production of those excipients can also be started on an immediate basis.

Yogin Mazumdar, Chairman of Bulk Drug Committee, IDMA commented, “We have suggested to the government to take into consideration about free capacities of nearly 30 per cent with many existing units which cannot be utilised under the present PLI scheme. It seems that the government is considering those recommendations and working on formulating a separate incentive scheme for the existing units. This time the government has not involved industry stakeholders in formulating the guidelines and they are doing it by themselves internally. But, earlier it comes, it will be better for the industry. Though we will need to study the fine print of the proposed guidelines once it is out.”

He also added, “We are hopeful the proposed scheme will be worthwhile in nullifying the Chinese competition. Because, with the spare capacities which are available with the “brownfield” units, it would give immediate results towards reducing our dependence over Chinese.”

According to an industry observer in the chemical synthesis category, out of 27 products, 20-21 products can be manufactured by the industry on an immediate basis, provided the government takes a prompt decision in implementing the proposed suggestion of announcing a short term incentive scheme. He mentioned that there are 20-25 manufacturers who have shown interest in the scheme and pointed out that manufacturing of nearly 75 per cent of products in the chemical synthesis category can be started soon as they have the capability and capacity, however, they were not willing to carry out the production due to intense investment criteria.