Central Government’s Second Production Linked Incentive (PLI) scheme which is envisaged to provide Rs 15, 000 crore worth of incentives for pharmaceutical sector will benefit 55 pharma manufacturers qualified under the scheme.
“The scheme has received a very good response from the industry and a total of 278 applications were received by the closing date of August 31, 2021 against which a maximum of 55 applicants were to be selected,” according to a government release.
Some of the leading companies under Group A category which will benefit under the scheme include Sun Pharmaceutical Industries Limited, Aurobindo Pharma Limited, Dr. Reddy’s Laoratories Limited, Lupin Limited, Mylan Laboratories Limited, Cadila Healthcare Limited, Cipla Limited, Amneal Pharmaceuticals Private Limited, Glenmark Pharmaceuticals Limited, Intas Pharmaceuticals Limited and Torrent Pharmaceuticals Limited among others.
Companies among Group B include Biocon Limited, MSN Laboratories Private Limited, Wockhardt Limited, Alembic Pharmaceuticals Limited, Emcure Pharmaceuticals Limited, Macleods Pharmaceuticals Ltd, Biological E Limited and Natco Pharma Limited among others.
Large chunk of Rs 11000 crores goes to Group A large 11 companies. Nine large companies under Group B gets total 2250 crores with each firm getting Rs 250 crore. Group C comprising MSME also gets Rs 1750 crores for 35 companies which translates to only Rs 50 crores per firm. Out of these 35 firms, twenty are MSMEs.
The Union cabinet cleared the second PLI second scheme in June 2021 for the domestic pharmaceutical sector for financial years 2020-21 to 2028-29.
The scheme will provide financial incentives on the incremental sales (over Base Year) of pharmaceutical goods and in-vitro diagnostic medical devices to selected applicants based on pre-defined selection criteria. The incentives will be paid for a maximum period of 6 years for each participant depending upon the threshold investments and sales criteria to be achieved by the applicant. The total quantum of the incentive for the scheme is Rs 15,000 crore and SIDBI is the Project Management Agency for the Scheme.
The applications were invited in three different categories of applicants to ensure fair competition and broad coverage amongst the industry players. The categories were based on the size of the applicant as determined by the global manufacturing revenues from pharmaceutical manufacturing.
The scheme covers three different product categories for which applicants have applied under the scheme. These products are expected to give an impetus to innovation, R&D and widening of product profile of India Pharmaceutical industry.
Category 1 includes Biopharmaceuticals; Complex generic drugs; Patented drugs or drugs nearing patent expiry; Cell based or gene therapy drugs; Orphan drugs; Special empty capsules like HPMC, Pullulan, enteric etc.; Complex excipients; Phyto-pharmaceuticals.
Category 2 includes Active Pharmaceutical Ingredients / Key Starting materials / Drug Intermediates (except the Active Pharmaceutical Ingredients / Key Starting materials / Drug Intermediates covered under the earlier PLI scheme for APIs/KSMs and DIs being implemented by the Department)
Category 3 (Drugs not covered under Category 1 and Category 2) includes Repurposed drugs; Auto immune drugs, anti-cancer drugs, anti-diabetic drugs, anti-infective drugs, cardiovascular drugs, psychotropic drugs and anti-retroviral drugs; In vitro diagnostic devices; Other drugs not manufactured in India.
The PLI Scheme for Pharmaceuticals is based on the strategy of “Atmanirbhar Bharat- Strategies for enhancing India’s manufacturing capabilities and enhancing exports in ten sectors”, which had been approved by the Union Cabinet on February 24, 2021. The Operational Guidelines for the scheme inviting applications from the pharmaceutical industry were issued on June 01, 2021 by the Department of Pharmaceuticals (DoP) after intensive consultation with industry and related departments and NITI Aayog.
The objective of the scheme is to enhance India’s manufacturing capabilities by increasing investment and production in the sector and contributing to product diversification to high value goods in the pharmaceutical sector. One of the further objectives of the scheme is to create global champions out of India who have the potential to grow in size and scale using cutting edge technology and thereby penetrate the global value chains.
The appraisal of the applications has been carried out on the basis of the ranking methodology laid down in the operational guidelines of the Scheme. The selection of applicants in each of the three categories has been approved by the Minister for Chemicals and Fertilizers.
The Group A consists of 11 selected applicants, Group-B consists of 9 selected applicants and Group-C consists of 35 selected applicants of which there are 20 MSMEs.
A Technical Committee comprising of experts is assisting the DoP with respect to the technical aspects of the scheme. SIDBI has put in place a digital mechanism for business processes being followed under the scheme. A robust monitoring framework will also be put in place to track the progress of the scheme.