The recent overhaul of the Promotion of Research and Innovation in Pharma-MedTech Sector (PRIP) scheme by the government might be insufficient to create an ecosystem for development of novel drugs in India, industry experts feel.
Development of a new drug molecule (new chemical entity) costs anywhere between $2-4 billion. With an estimated outlay of Rs 5,000 crore, the scheme falls short of the requirement, even taking into consideration that the bulk of the funds must come from the drug companies, as equity or debt, they said.
Funding gap for novel drug discovery
The scheme provides direct financial support in the form of grants to the eligible entities to cover a percentage of their project cost over a period of five years. This amount will not have to be repaid.
“The scheme was notified in 2023 but due to the weak industry participation, the government had to revise it. Even though the funds allocated are inadequate, we may see progress in areas like process development and new drug delivery systems,” said spokesperson of a leading pharma association, on condition of anonymity.
Last week, the department of pharmaceuticals (DoP) invited applications for research and innovation projects under the PRIP scheme which plans to support around 300 projects involving total R&D investment of about Rs 11,000 crore in new medicines, complex generics, biosimilars and novel medical devices.
For early stage projects, MSMEs and startups can receive assistance of up to Rs 5 crore for projects costing up to Rs 9 crore. For later stage projects costing up to Rs 285 crore, the assistance can reach up to 35% of the project cost, subject to a maximum of Rs 100 crore. For strategic priority innovations (SPIs) addressing critical public health issues like orphan drugs or antimicrobial resistance (which have limited market demand), financial assistance will extend up to 50% of the cost.
Incentivizing early-stage R&D and global alliances
Experts said that the scheme will incentivise R&D alliances between Indian companies and global pharma firms under which domestic companies can receive “milestone payments” that will be linked to the completion of a successful stage of their research work.
“The scheme will provide impetus to the Indian pharma sector, especially to the start ups and MSMEs, to work on R&D till a particular stage, and then sell the concept to a bigger company. The commercial rewards made in such an agreement will be shared with the government up to the level of financial assistance,” said the spokesperson.
Sudarshan Jain, secretary general of Indian Pharmaceutical Alliance (IPA) said that even though the new drug development costs much more, India has to find its own way to promote R&D in the sector. “This scheme will unleash a wave of innovation and R&D in the country, and we expect new ideas to emerge going forward,” he said.
Meanwhile, the industry is hopeful that the revised scheme will garner much higher participation this time.
“The response is likely to be decent despite the risks involved in the pharma innovation where a large proportion of the ideas fail to reach even the clinical trials or regulatory stages,” said a pharma analyst. The DoP has asked the interested entities to send their applications till November 10.