Pharma sector raises concerns over proposed incentives cut

Union government is allegedly cutting down support to bulk drug manufacturing from a proposed outlay of Rs 5,000 crore to nearly Rs 600 crore

The pharmaceuticals industry has raised concerns over the Centre’s proposal to reduce incentives for bulk drug manufacturing.

The Union government earlier announced plans to set up bulk drug parks in various parts of the country, along with other incentives and a policy, with an outlay of around Rs 5,000 crore. Now, this has been reduced to setting up of common effluent plants in three bulk drug parks, with a total outlay of Rs 600 crore.

The bulk drug policy was expected to support manufacturing of active pharmaceutical ingredients (API) and intermediates, the ingredients used to produce the final formulation medicine, to cut down the dependence on China for these raw materials. The idea to boost domestic manufacturing was also to protect the country from the risk of serious drug shortage, if the inflow from China is affected due to any adverse issues.

 

“More than the parks, the industry was expecting some incentives or funds to upgrade the facilities, subsidies for land to set up manufacturing plant and electricity, among other supports, which are not expected to come now,” said S V Veerramani, president, Indian Drug Manufacturers Association (IDMA).

According to a recent report, Union Chemicals and Fertilisers Minister Ananth Kumar said the government has decided against a bulk drug policy and instead, states will have to come up with “bulk drug parks” which will help boost manufacturing of bulk drugs. 

M Narayana Reddy, managing director of Virchow Laboratories and a leader in Bulk Drug Manufacturers Association, said a policy could have encouraged the sector to meet the infrastructure and related concerns. The company has been manufacturing some of the intermediate products, which are one or two steps away from the final pharmaceutical product and exporting it to China. China has imposed an anti-dumping duty on one of its products six years ago.

API imports to India was around $2.22 billion in 2014-15.

“According to the reports available, in case of 12 essential drugs namely; Paracetamol, Metformin, Ranitidine, Amoxicillin, Ciprofloxacin, Cefixime, Acetyl salicylic acid, Ascorbic acid, Ofloxacin, Ibuprofen, Metronidazole and Ampicillin, there is significant dependence on imports for drug ingredients and substantial imports of these products are from China,” she said.

The policy was expected to address various issues including the delay in environment clearance, which has been affecting the industry. The industry has to get environmental clearance everytime the bring in a new product or replace an old one and the process is currently taking around two years to complete. The manufacturing of a few kilograms of chemicals should not be considered equal to manufacturing of large quantity of chemicals by other industries, said industry representatives.

They added that the industry is pursuing with the Ministry of Environment and Forests to address the delay in clearances. 

A committee, constituted to study and identify the Active Pharmaceutical Ingredients (APIs) of critical importance and to consider a measures required to build domestic production capabilities etc, has in its findings reported that the API industry in the country has to be made more viable and there is a need for building an eco system to promote investment in the sector, based on global practices. There are also recommendations for improving the regulatory regime in the country, said Sitharaman earlier.