The government launched the scheme to encourage the pharmaceutical industry to enhance its manufacturing capabilities, diversify the product mix to complex generics, patented drugs, going up the value chain, bringing investment, and creating global champions out of India. A new PLI scheme was notified by the government on March 3, 2021.
The new scheme is more extensive in its coverage as compared to the first PLI and the objective is to help boost pharma production of India over a longer-term.
The government will offer as many as 55 drugmakers a total of ₹15,000 crore in production-linked incentives for six years through FY29 to boost manufacturing of medicines, in-vitro diagnostics and their raw materials in India.
The incentives, similar to cashback, would be given to the drugmakers as a proportion of incremental sales, over and above the revenue generated by the product in the financial year 2019-20.
The application window is for 60 days starting from June 2, 2021, to July 31, 2021.
CATEGORIES :
The department of pharmaceuticals (DoP), which has formulated the scheme, has divided the products—which consist of formulations, biopharmaceuticals, bulk drugs, and in-vitro diagnostic medical devices, among others—into three categories, which as under follow:
CATEGORY-A:
- Category-A is meant for companies that have Global Manufacturing Revenue (GMR) of pharmaceutical goods of Rs 5,000 crore and above in 2019-20.
- It comprises of biopharmaceuticals, complex generics, patented drugs or drugs nearing patent expiry, cell based or gene therapy drugs, orphan drugs, special empty capsules like HPMC, Pullulan, enteric, complex excipients, phytopharmaceuticals and other drugs.
- The eligible Category-A manufacturers have earmarked a total incentive of Rs 11,000 crore.
CATEGORY-B:
- Category-B is for manufacturers who have a GMR of above Rs 500 crore and less than Rs 5,000 crore.
- The government earmarked Rs 2,250 crore for Category-B products these include Active Pharmaceutical Ingredients and Key Starting materials or Drug Intermediates.
CATEGORY-C:
- Category-C is for manufacturers who have a GMR of less than Rs 500 crore.
- The government earmarked Rs 1,750 crore as total PLI for formulations such as repurposed drugs, autoimmune drugs, anti-cancer drugs, anti-diabetic drugs, anti-infective drugs, cardiovascular drugs, psychotropic drugs, and anti-retroviral drugs.
- The category also includes chemicals and reagents for in-vitro diagnostic devices and other drugs.
ELIGIBILITY:
- A company that has made or plans to make investments on or after 1 April 2020 will be considered eligible for the scheme, the DoP said in its statement.
- The DoP, through a selection committee, will choose a maximum of 55 applicants under the scheme, who will be allowed to apply for more than one product across any of the three categories through a single application, provided they meet the criteria for each category.
- To be eligible, the company has to make investments worth anywhere between ₹50 lakh and ₹50 crore, depending on the category of the drug and the company’s financial capability.
- The investment includes the cost of new plant and machinery, equipment and associated utilities, research and development, transfer of technology, product registration, and expenditure incurred on the building where the plant and machinery are installed.
IMPORTANT POINTS:
- A Technical Committee will assist the department in all technical issues which arise during the implementation of the scheme.
- SIDBI, the Project management Agency selected for this scheme, will be responsible for implementation and will be the interface with the industry for all issues with respect to online applications, selection of applicants, verification of investments, verification of sales, and disbursal of incentives, etc.
- “A selected participant will be able to get a maximum incentive of Rs 1,000 crore, Rs 250 crore and Rs 50 crore, respectively depending upon its group over the period of the scheme,” the government said.
- The additional incentive will be available based on performance but subject to certain conditions.
- In no case, the total incentive including additional inventive would be more than Rs 1,200 crore, Rs 300 crore, and Rs 60 crore per selected participant, respectively above the three categories over the period of the scheme
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