The central government plans to set up a Rs 10,000-crore venture capital (VC) fund for supporting drug discovery and research infrastructure development projects in the country.
The fund, to be managed by an independent asset management company, will come up under a public-private-partnership model, with the government contributing 15 per cent of the total fund size.
The funds will be made available to companies that are into drug discovery and research, which have a low success rate. “The bid documents will be ready by the end of the month. We will soon invite consultancy firms for preparing a detailed project report on the proposed VC fund,” said Ashok Kumar, secretary, Department of Pharmaceuticals.
Speaking to reporters on the sidelines of a Ficci event on biotechnology here today, Kumar said the fund will start functioning with a small corpus. “Initially, we are targeting a fund size of about Rs 3,000 crore. Depending on the response, it can go up to Rs 10,000 crore by 2015.”
The National Institute of Public Finance and Policy (NIPFP) is advising the department on selecting an agency to design the fund.
According to a senior department official, the need for the fund was felt after it was found that early-stage discovery funding was almost nil. The participation of the fund will augment the efforts of the Department of Science and Technology and the Department of Biotechnology to provide financial support — though on a small scale — to encourage basic drug research.
Last year, the Department of Pharmaceuticals had released a white paper on promoting research and development funding in the pharma sector. The key areas identified were development of infrastructure and talent, encouragement to PPPs and developing a system to finance such programmes.
