Several concerns plague products in the PLI scheme

The Department of Pharmaceuticals (DoP) today said that the Indian manufacturers are not interested in manufacturing some of the products under the production linked incentive (PLI) scheme. Even after taking much effort by the Department, three or four products may not have any interested candidates, and the Department might have to replace them with other products.

Lack of market, investment and scale requirements, and concerns about cost competitiveness are some of the reasons the manufacturers aren’t interested in these products.

The Department of Pharmaceuticals (DoP)  had extended the timeline for the industry to submit applications for the third round and the bulk drugs for the second time to April 30, 2022.

The government of India came out with the first production-linked incentive (PLI) scheme for critical starting materials (KSM), active pharmaceutical ingredients (APIs), and drug intermediates (DI) in 2020. Forty-one eligible products were notified. Of these, the Department did not receive applications for eight to10 products.

These products are critical as their domestic production can reduce India’s dependency on imports and make the country self-reliant; the Department had informed the Department Related Parliamentary Standing Committee on Chemicals & Fertilisers. The committee was headed by Kanimozhi Karunanidhi, a Member of Parliament.

To an observation made by the committee, which claimed that the Department must look into the reasons for not receiving enough applications and try to solve any challenges, the Secretary Department of Pharmaceuticals has clarified that for 33 products out of 41, the Department had already found bidders. Many of these have also started production.

“In eight where we have not got bidders, most of them are fermentation-based. Out of those eight, the list was prepared at that time; now, when we are talking to the industry as to why they are not able to apply, etc., the industry is of the opinion that a few of these APIs do not have much market anymore. They mention neomycin, gentamicin, etc.,” the secretary said.

For the others, particularly in fermentation, the technology is a challenge, large-scale production is required, and high costs. The government of other countries is helping by providing a very high level of support.

“We do not know about it. But in India, we depend on the States to provide those kinds of incentives,” she said. “We have now talked to some industries to come forward. I may share that it is possible that three or four may still be left out. Then we will go to the Cabinet to drop these and take other products because the Cabinet approves the list. I do not want to go to Cabinet unless I have explored all possible options,” the secretary told the committee.

The committee recommended that the Department should consider providing very high-level support to any entrepreneurs who may come forward to set up these particular industries in terms of adequate water supply at low cost, subsidized power cost, lower environmental cost, single-window environmental clearance, etc.; in coordination with the concerned State and Union Territory governments to attract more investment in the sector.

“The Department in consultation with various stakeholders should prepare a list of alternate products in place of eight APIs/KSMs which are no longer necessary because of less demand and seek Cabinet approval for those alternate APIs for inclusion under the scheme,” it asserted

As the fermentation-based APIs have to be based on complex and costly technology, research and development must be encouraged for cost-effective alternative technologies for the fermentation process. NIPERs must also be engaged in R&D; for this, it recommended.