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Govt’s screening panel in place, state agencies can approach DoP for fund assistance to set up CFCs at API parks
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Arun Sreenivasan, New Delhi
October 24 , 2018
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Implementing agencies set up by state governments can now approach the Department of Pharmaceuticals (DoP) with detailed project reports to get financial backing for building common facility centres (CFCs) at bulk drug parks and clusters. The Rs.200 crore scheme, to be implemented with state participation, was announced in June by the Centre amid rising criticism over lack of incentives for the domestic active pharmaceutical ingredient (API) industry.
A four-member Scheme Steering Committee (SSC) headed by the DoP secretary is now in place for approving and monitoring CFC projects and chief secretaries of all states and union territories are already notified about its formation. The top panel includes financial adviser to ministry of chemicals and fertilisers and Joint Secretary at ministry of environment, forest and climate change. DoP Joint Secretary Policy is its convenor.
The financial assistance would be offered as one-time grant to the implementing agency, that should be constituted by state governments. Since API and intermediate units are spread across the country with a significant presence in four or five states, the benefit of common facilities such as central effluent treatment plants, captive power plants and incubation centres is not always available making the sector uncompetitive. According to industry sources, the proposed scheme is expected to address this issue as a well-equipped CFC can slash production cost by 25 per cent in the bulk drug park. Apart from giving state governments and corporations a constructive role, the Central government’s hand-holding will be a morale-boosting move for upcoming bulk drug parks, they say.
The maximum limit of grant is Rs.100 crore per CFC or 70 per cent of its project cost, whichever is less. The project cost includes cost of land, building and preoperative expenses.
As per the guidelines issued by the government, the SSC could co-opt representatives of industry associations, R&D institutions and private sector experts to assess projects before giving the green light. An in-principle approval would be accorded by the panel based on preliminary proposal submitted by the implementing agency or a state government. The clearance will be valid for a period of six months and the state authority is expected to obtain the final approval during this period.
The dilly-dallying of the Central government on steps to revive the API sector, despite the country’s heavy dependence on Chinese imports, has been drawing flak from the domestic industry. A recent crackdown by Beijing on polluting industries is continuing to dramatically raise the price of imported bulk drugs, wiping out profit margins of Indian pharmaceutical firms. The price rise has forced many Indian companies to cut down on production, leading to a shortage of certain key drugs in the market. Meanwhile, a high-level API task force constituted by the government five months back to decide on regulatory interventions is yet to hold its first meeting with industry stakeholders.
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