Govt revamps pharma scheme, to provide financial assistance to drug cos

Financial support for drug companies also comes against the backdrop of deaths being reported abroad due to the manufacture of substandard drugs linked to Indian companies

The Department of Pharmaceuticals on Monday announced the Revamped Pharmaceuticals Technology Upgradation Assistance (RPTUAS) scheme. It aims to offer financial support to drug manufacturers for upgrading their technological capabilities and aligning with global standards.

The revamped scheme comes after the department introduced revised Schedule-M guidelines for compliance with good manufacturing practices (GMP) in January this year. Many medium and small manufacturers had then asked for the guidelines to be implemented gradually. 

The support for drug companies also comes amid reports of deaths abroad due to the production of substandard drugs linked to Indian companies. 

“The revised guidelines aim to support the pharmaceutical industry’s upgradation to the revised Schedule-M and World Health Organisation’s GMP standards, enhancing the quality and safety of pharmaceutical products manufactured in our country”, the department stated in a statement.

According to the revamped scheme, the government has broadened the scope of assistance beyond micro, small and medium enterprises (MSMEs) to include any pharmaceutical manufacturing unit with a turnover of less than Rs 500 crores, which requires technology and quality upgradation.

MSME drug manufacturers are classified as those having an annual turnover of less than Rs 250 crore. Of the 10,500 drug manufacturing units in India, nearly 8,500 units fall under the MSME category.  

Under the revised scheme, a new incentive structure will be implemented, where the average turnover for the past three years will be seen for a pharmaceutical unit to be eligible for incentives under ‘eligible activities’.

The eligible activities include improvements such as heating, ventilation, air and cooling (HVAC) systems, water and steam utilities, testing laboratories, stability chambers, clean room facilities, effluent treatment and waste management.

Under the revised incentive structure, units with turnover from Rs 1 crore to Rs 50 crore will be reimbursed 20 per cent of investment under eligible activities. 

Similarly, units with turnover between Rs 50 crore to Rs 250 crore will get 15 per cent of investment under eligible activities while units with turnover from Rs 250 crore to less than Rs 500 crore will get 10 per cent of investment under eligible activities.

The scheme offers flexible financing, prioritising reimbursement-based subsidies over traditional credit, aiming for widespread adoption and comprehensive compliance support with new standards.

“It also offers a dynamic incentive structure and integration with state government schemes, enabling units to benefit from additional top-up assistance. The verification mechanism has also been enhanced through the Project Management Agency (PMA)”, the department said.