Government working on Incentive Scheme to boost domestic API manufacturing

To reduce the dependency of the pharmaceutical industry's on imports from China, the government is working on an incentive scheme to boost domestic manufacturing of active pharmaceutical ingredients (APIs). Published reports suggest that the Department of Pharmaceuticals (DoP) has proposed the creation of a corpus fund of Rs3,000 crore for companies that are interested in setting up API or fermentation units in India.

The incentive-based scheme has been formulated in consultation with the government's think tank NITI Aayog and is likely to seek cabinet approval soon.

Actually, the government is willing to slowly but steadily shift the API manufacturing facilities from China to India and for the purpose, finance ministry and Prime Minister's Office together are working on the blueprint that promotes manufacturing of APIs. They are ready to handhold the API manufacturing but it can be done if someone invests about Rs 500 crore in setting up a new API manufacturing facility.

Reports are there that says that 38 drugs have been identified and the government wants to take immediate action to reduce the dependence on Chinese imports. A leading business channel has said in its report that the government has also identified 23 manufacturing facilities of APIs which actually were existing in India, but shut down as manufacturers shifted to China due to cost-effectiveness. It has a willingness to revive these 23 units as soon as possible as a limited investment will be required to revive them.

Besides, the DoP on Tuesday constituted a technical committee who will be responsible for recommending the ways for the revival of fermentation industry, new technologies needed for the manufacturing of APIs, costing of projects and identification of strategic business models.

On the same day, the government on the recommendation of a committee of experts, put export restrictions on 26 pharma ingredients and medicines, including paracetamol, vitamin B1 and B12, amid the coronavirus outbreak in China. Apart from paracetamol, vitamin B1, B6 and B12, other APIs and formulations over which the export restrictions have been imposed Include Tinidazole, Metronidazole, Acyclovir, Progesterone, Chloramphenicol, Ornidazole, formulations made of Chloramphenicol, Clindamycin Salts, Neomycin, and Paracetamol.