The Government is planning to set up a Rs 10,000 crore venture capital (VC) fund for financing new drug discovery projects in the country.
"We will soon invite bids from consultancy firms for establishing a venture capital fund in public-private- -partnership that would finance research and development (R&D) activities in the pharmaceutical segment," Department of Pharmaceuticals Secretary Ashok Kumar told reporters on the sidelines of a Ficci event.
The department will soon invite bids from advisors to prepare a detailed project report on the proposed fund, Kumar said.
The initial target will be to raise up to Rs 3,000 crore by 2011-12, and it would be gradually increased to Rs 10,000 crore by 2015, he added.
National Institute of Public Finance and Policy (NIPFP) is advising the department in the process of selecting an agency to design the fund.
Kumar said that though the government aims to make India a hub for new drug development activities, no institutional funding is currently available for the purpose in the country.
According to information available, the country spends about Rs 2,000 crore every year on R&D. While the government contributes Rs 500 crore to this, the rest comes from the private sector.
The proposed funding of Rs 10,000 crore, which includes substantial contribution from the private pharma industry under the public private partnership (PPP) model, is likely to bring about a favourable environment for drug innovation, Kumar said.
Last year, the department of pharmaceuticals had prepared a white paper on promoting research and development funding in the country, and submitted the proposal to the Prime Minister's Office for approval.
"The present state of infrastructure and research and development of the pharma industry in the country is rather weak," Kumar said.
As per the proposal, the government intends to undertake pro-active steps on four fronts, building infrastructure for talent and research, encouraging public-private partnerships in infrastructure development, providing financial incentives to encourage innovation, and shaping a favourable regulatory environment.
