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The Department of Pharmaceuticals under the Union government has released the first tranche of incentives under the Product Linked Incentive (PLI) scheme of pharmaceuticals amounting to Rs 166 crore to four selected applicants.
The companies which are set to be benefitted under the scheme in the first phase include Dr Reddy’s Laboratories Limited, Biocon Limited, Strides Pharma Science Limited and Premier Medical Corporation Private Limited.
The total financial outlay under this PLI scheme, launched in 2021, is Rs 15,000 crore over a period of six years and so far, 55 applicants have been selected under the scheme, including 20 Micro, Small & Medium Enterprises (MSMEs).
The financial year of 2022-2023 being the first year of production for the PLI Scheme, DoP has earmarked Rs 690 crore as the budget outlay.
Focus on self-reliance
With an objective to enhance India’s manufacturing capabilities and contribute to product diversification towards high-value goods in the pharmaceutical sector, three different categories of products are being supported under the scheme.
These include biopharmaceuticals, complex generic drugs, patented drugs or drugs nearing patent expiry, cell-based or gene therapy drugs; orphan drugs, special empty capsules and Complex excipients.
The government’s support is also being extended to bulk drugs and drugs like repurposed medicines, auto-immune drugs, anti-cancer drugs, anti-diabetic drugs, anti-infective drugs, cardiovascular drugs, psychotropic drugs and anti-retroviral drugs.
The incentives for incremental sales to selected participants under these categories are at varying rates over the years ranging from 10 percent to 3 percent.
Against the expected investment of Rs. 17,425 crore in the pharmaceutical sector over the scheme period, the scheme has garnered an investment of Rs 16,199 crore by these 55 applicants in the first year of implementation itself.
And against the expected employment of one lakh over a six-year scheme period, 23,000 persons have been given employment so far.
Based on the information submitted by the applicants, about Rs 2,200 crore incentives (out of a total outlay of Rs 15,000 crore under the scheme) will be claimed based on the expected sales in FY 2022-23.
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Out of this, applicants are expected to file an incentive claim of about Rs 850 crore of incentive claims before the end of March 2023.
The department, it said in a statement, received an incentive claim of about Rs 544 crore from 15 applicants. Based on the evaluation, Rs 221 crore of claims of incentives from four applicants which included Dr. Reddy’s Laboratories Limited, Biocon Limited, Strides Pharma Science Limited, Premier Medical Corporation Private Limited, were found to be eligible and 75 percent of this amount has been released while the remaining incentives are under examination.
As of January 31 2023, sales of about Rs. 36,000 crore have been reported by the select 55 applicants.
Similar schemes
The government also said the DoP also implements two other PLI schemes, namely PLI for Bulk Drugs and PLI for Medical Devices, which have achieved significant milestones in the first year of implementation.
Under the PLI scheme for Bulk Drugs with a financial outlay of Rs 6940 crore, the objective is to boost domestic production of 41 select critical bulk drugs in the country and so far, 51 projects have been selected for the 34 notified bulk drugs.
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The government also said that the medical devices being manufactured under the PLI scheme include high-end medical devices such as CT scan, MRI coil, linear accelerator (LINAC), C-Arm, ultrasonography, dialysis machine, intensive care ventilators, knee implants, hip Implants, heart valves, stents and dialyzer.
Some of these medical devices are being domestically manufactured for the first time in the country.
