Opinion

A big leap towards improving India’s health security

Mansukh Mandaviya | Updated on March 29, 2020

The govt’s ₹13,760-crore scheme for ‘bulk drug’ and ‘medical devices’ manufacturing will help reduce our dependence on imports

India is quite developed as far as medicine manufacturing is concerned. India’s pharmaceutical market is around ₹3 lakh crore. During the year 2018-19, India exported pharmaceuticals worth $19.15 billion. Out of the top 20 global generic companies, eight are from India. Having the US as the largest exporting partner, India produces 65 per cent of the WHO demand for DPT, BCG and 90 per cent for measles vaccine. Even after these, India still imports some key raw materials.

Three years ago, a Task Force on API (Active Pharmaceutical Ingredients or key raw material for medicines) was formed by the government, after having consultations with the pharmaceutical industry and all other stakeholders, who also examined various data. India is largely an importer of 53 APIs/KSMs (key starting materials) / intermediaries. Most of the country’s demand is dependent on import of these key raw materials. Simultaneously, we also studied the reason behind import and non-manufacturing of these key raw materials in the country. Likewise, we conducted studies in medical devices.

All these were done to meet Prime Minister Narendra Modi’s vision of providing the country with “security of drugs”. My Ministry has chalked out an umbrella scheme of ₹13,760 crore for “Bulk Drug Manufacturing” and “Medical Devices Manufacturing”.

The first scheme under this umbrella is helping State governments to establish three Bulk Drug Parks with minimum area of 1,000 acres of land, where the Central Government will provide help by way of grant-in-aid of a maximum ₹1,000 crore. This amount will be for different common facilities like solvent recovery plant, power and steam units, distillation plants, common effluent treatment plants, etc.

The common facility will help reduce the manufacturing cost.

The second scheme is aimed at incentivising incremental production over base year of critical drugs manufactured in India. We have identified 26 fermentation based and 27 chemical based key raw materials for which the country is largely dependent on imports. We have formulated a scheme to give 20 per cent incentive for the first four years, 15 per cent for fifth year and 5 per cent for the sixth year on incremental manufacturing.

We have identified 27 chemical based key raw materials for which 10 per cent incentive will be provided during the six-year period of the scheme. These KSMs are largely for producing anti-cancer drugs, antibiotics, anti-inflammatory, and anti-diabetic drugs.

The third scheme focusses on promotion of domestic manufacturing of medical devices. The scheme proposes grant-in-aid to State governments for establishing four Medical Device Parks in the country with maximum of ₹100 crore for each park to create modern common facilities like component testing centre, electro-magnetic interference laboratory, medical grade low-vacuum moduling, sterilisation and electricity testing centre, etc.

The fourth scheme under the umbrella is to help manufacturers of medical devices of the target segment. A Production Linked Incentive (PLI) scheme is formulated to provide incentive at 5 per cent for six years to manufacturers of medical devices of four categories — cancer care/radio therapy medical devices, aesthetic and cardio respiratory medical devices, radiology and nuclear medicine devices and all implants like cochlear and pacemakers. During these six years, ₹3,420 crore will be distributed as an incentive to the manufacturers under the scheme.

We are also envisaging additional production of medical devices of ₹68,437 crore during the first five years and about ₹19,000 crore of import substitutions per annum; this will also help us in export of medical devices. Likewise, incremental production of KSMs of target segment of ₹ 46,800 crore during the five years and import substitution of ₹19,0000 crore per annum are also targeted.

In this exercise to augment our manufacturing sector in KSMs and medical devices, we have put four schemes for six years. This effort will help us to promote ‘Make in India’, import substitution, scale up exports and achieve “national security of drugs” in the next five years.

The writer is Minister of State (Independent charge) for Chemicals, Fertilizers and Shipping

Published on March 27, 2020

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