DoP issues operational guidelines for PLI Scheme for pharma industry

New Delhi: With an aim to enhance India's manufacturing capabilities by increasing investment and production in the pharmaceutical sector and to contribute to product diversification to high-value goods, the Department of Pharmaceuticals (DoP) has recently issued Operational guidelines for the Production Linked Incentive (PLI) Scheme for pharmaceuticals with an approved outlay of Rs 15,000 crore.

DoP notified the 'Production Linked Incentive (PLI) Scheme for Pharmaceuticals' vide Gazette Notification No.31026/60/2020-Policy-DoP dated 3rd March 2021. The scheme envisages creating 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.

Based on a series of consultations with the pharmaceutical industry and stakeholders in the Government, the operational guidelines for the scheme have been prepared and issued on 1st June. The scheme is now open to applications from the industry.

The applications are invited in three groups based on the Global Manufacturing Revenue of FY 2019-20 of the applicants as given below:

Group A: Applicants having Global Manufacturing Revenue (FY 2019-20) of pharmaceutical goods and/or in vitro Diagnostic Medical Devices more than or equal to Rs. 5,000 crore.

Group B: Applicants having Global Manufacturing Revenue (FY 2019-20) of pharmaceutical goods and/or in vitro Diagnostic Medical Devices between Rs. 500 (inclusive) crore and Rs. 5,000 crore.

Group C: Applicants having Global Manufacturing Revenue (FY 2019-20) of pharmaceutical goods and/or in vitro Diagnostic Medical Devices less than Rs. 500 crore. This group shall include a sub-group for MSME applicants, i.e., applicants registered as Micro, Small & Medium Enterprises (MSME) with the Ministry of MSME, Government of India.

It is also specified that all applications would be filed via an online site operated by SIDBI, the scheme's Project Management Agency. The application may be submitted using the website https://pli-pharma.udyamimitra.in. The application window will be open for 60 days, from June 2nd to July 31st, 2021. (Both dates inclusive)

In a statement, the Ministry of Chemicals and Fertilizers has categorized the eligible products into three categories, under the scheme which include formulations, biopharmaceuticals, active pharmaceutical ingredients, key starting material, drug intermediates, in-vitro diagnostic medical devices, etc. Further, the statement added, "The category-1 and category-2 products attract 10% incentive and category-3 products attract 5% incentive on the incremental sales. Incremental sales of a product mean sales of that product in a year over and above the sales of that product in FY 2019-2020. "

The scheme shall cover pharmaceutical goods under three (03) categories as mentioned below-

(I) Category 1

1. Bio-pharmaceuticals

2. Complex generic drugs

3. Patented drugs or drugs nearing patent expiry

4. Cell based or gene therapy drugs

5. Orphan drugs

6. Special empty capsules like HPMC, Pullulan, enteric etc

. 7. Complex excipients

8. Phyto-pharmaceuticals

9. Other drugs as approved*

(II) Category 2

Active Pharmaceutical Ingredients / Key Starting Materials / Drug Intermediates except for the 41 eligible products already covered under the "Production Linked Incentive (PLI) Scheme for promotion of domestic manufacturing of critical Key Starting Materials (KSMs) / Drug Intermediates (DIs) / Active Pharmaceutical Ingredients (APIs) in India" notified by Department of Pharmaceuticals (DoP) vide Gazette Notification no.- 31026/16/2020-Policy, dated 21/07/2020 in Part-I, Section 1 of the Gazette of India (Extraordinary)

(III) Category 3 (Drugs not covered under Category 1 and Category 2)

1. Repurposed drugs

2. Auto immune drugs, anti-cancer drugs, anti-diabetic drugs, anti-infective drugs, cardiovascular drugs, psychotropic drugs and anti-retroviral drugs

3. in vitro diagnostic devices

4. Other drugs not manufactured in India

5. Other drugs as approved*

(* Decision will be taken by DoP to include any drug based on the requirement, CDSCO approvals, TC opinion which will take into account the current levels of production, availability, etc. The decision of DoP will be aligned with the objectives of the scheme.)

In continuation with the above, based on clearly laid out selection criteria given in the guidelines, it is also notified that a maximum of 55 applicants will be selected under the scheme.

"An applicant, through a single application, can apply for more than one product and the products applied by an applicant can be in any of the three categories. The applicants will be required to achieve minimum cumulative investment per year over a period of 5 years as prescribed under the scheme. The investment could be under new plant and machinery, equipment and associated utilities, research and development, transfer of technology, product registration and expenditure incurred on the building where plant and machinery are installed. The investment made on or after April 01, 2020, will be considered as an eligible investment under the scheme." the notification added.

Thereafter, it is specified that the selected manufacturers will be able to receive production linked incentives based on incremental sales of pharmaceutical products for a period of 6 years. A selected participant will be able to get a maximum incentive of Rs 1000 crore, Rs 250 crore and Rs 50 crore respectively depending upon its group over the period of the scheme. 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 1200 crore, Rs 300 crore and Rs 60 crore per selected participant respectively for the three groups over the period of the scheme.

Further, it is stated that an Empowered Group of Secretaries will undertake periodic reviews of the scheme to ensure its smooth implementation along with the other PLI schemes of the Govt. of India. 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.

The pharmaceutical and the in-vitro diagnostic industries are expected to actively participate in the scheme and contribute to further strengthening the sector.

To view the guidelines, click on the link below:

Also Read:DoP invites applications under PLI scheme to boost Medical Device manufacturing, Details