Impact of COVID-19 on Indian Pharma Industry: Minister apprises parliament
Under the Production Linked Incentive (PLI) Scheme, financial incentives shall be given based on sales made by selected manufacturers for 41 products which cover all the identified 53 APIs.
New Delhi: The impact of fatal COVID-19 on the domestic pharma industry was brought up in the recent Lok Sabha session, wherein, the Union Minister of Chemical and Fertilizers, D V Sadananda Gowda informed the Parliament that the government has prepared two schemes for promoting domestic manufacturing of bulk drugs to reduce the country's dependence on imports of various Active Pharmaceutical Ingredients (API) from China.
The two schemes namely, the Production Linked Incentive (PLI) scheme and the Promotion of Bulk Drug Parks scheme were approved by the Cabinet on 20.03.2020, which are expected to attract substantial investments, increase domestic production of Key Starting Materials (KSM), Active Pharmaceutical Ingredients (API) and DIs.
This came in response to a query raised by the Manoj Kishorbhai Kotak, seeking information on whether the Government has made any assessment of the impact of the COVID-19 pandemic on the country's pharma industry in view of the fact that the country imports 70 percent of raw materials from China for the manufacture of medicines.
Kotak further added whether the Government has any plan to support the pharma sector to source raw materials for drugs from other countries.
Responding to the same, Gowda explained that many raw materials are imported from China, for the manufacturing of medicine. As per available data from the various Port Offices of the Central Drugs Standard Control Organization (CDSCO), the details of the percentage of raw materials imported from China showed that in the year 2017-18, 68.62 percent raw materials were imported in (terms of value), while 66.53 percent and 72.40 percent was imported in the year 2018-19 and 2019-20 respectively.
He added that the reported restrictions on the movement of people, lockdown enforced in various places, logistic issues, etc. due to the outbreak of Coronavirus in China could have impacted the supply of raw materials from China.
He further elaborated that under the provisions of the Drugs and Cosmetics Rules, 1945 various sites of different countries are registered by the CDSCO for import of various Active Pharmaceutical Ingredients (API) which are used in the manufacture of drug formulations in the country.CDSCO is reviewing all such applications for the import of APIs in an expeditious manner for which India is highly dependent on China.
"The Government assessed the impact of the COVID-19 pandemic on the availability of Active Pharmaceutical Ingredients (API), intermediates, and Key Starting Materials (KSM) for which India is critically dependent on China. Accordingly, an inter-ministerial Committee was constituted on 06.02.2020 to address the issue of drug security in the country," the Minister stated.
The committee submitted its report on 27.02.2020. The Committee observed that there are 58 APIs for which the country is heavily dependent on China. Further, a Technical Committee was also constituted on 02.03.2020 to make recommendations for the revival of the fermentation industry, new technologies for the manufacturing of APIs including its backward integration, costing of the projects, and identification of strategic business models. The Committee also examined the 58 APIs identified by the Drug Security Committee and recommended a scheme for 53 APIs.
On the basis of the recommendations of the committee, the Department has prepared two schemes for promoting the domestic manufacturing of Bulk Drugs which were approved by Cabinet on 20.03.2020 viz. Production Linked Incentive (PLI) scheme and scheme for Promotion of Bulk Drug Parks. Under the PLI Scheme, financial incentives shall be given based on sales made by selected manufacturers for 41 products which cover all the identified 53 APIs.
"The new Schemes are expected to attract substantial investments, increase domestic production of KSMs, DIs, and APIs, and reduce the country's import dependence to a large extent," the Minister's response read.