Indian government plans to optimization of resources SMEs and bulk drug industry

Aiming to reduce the cost of bulk drugs by 20%-25% and to help small and medium pharmaceutical enterprises (SMEs) upgrade their technology, the Indian government is looking to pump in several millions to support and shore up the drug industry, reports The Pharma Letter’s India correspondent.

The government is keen to provide assistance to the bulk drug industry to "ease the competitiveness, provide easy access to standard testing and infrastructure facilities and value addition" through the creation of common facility centers. Proposed as a central sector scheme, the total size of the bulk drug scheme has been placed at $29 million for 2018-2020.

"The aim is to strengthen the existing infrastructure facilities in order to make the Indian bulk drug industry a global leader in bulk drug exports," said an official. Reducing the cost of production in the bulk drug park will also lead to better availability and affordability of bulk drugs in the domestic market, the official added.

Price reductions

In the domestic market, the National Pharmaceutical Pricing Authority (NPPA) has fixed the retail and ceiling prices of 22 formulations used for the treatment of various ailments including HIV, bacterial infections and cardiac condition, among others.

The regulator has fixed ceiling prices of co-trimoxazole sulphamethoxazole and trimethoprim tablets used for treating a variety of bacterial infections. It has also fixed the retail prices of drugs like omeprazole domperidone capsule, to treat acidity and gastroesophageal reflux disease, and clotrimazole beclomethasone cream, for a variety of inflamed fungal skin infections.

The price of rosuvastatin clopidogrel, used to lower cholesterol levels and triglycerides and tenofovir disoproxil fumarate lamivudine efavirenz tablet, an HIV treatment, have also been lowered.

Five sub schemes

Announcing guidelines for five sub-schemes under the Pharma Development Program, the Department of Pharmaceuticals (DoP) said the main objective is to reduce the cost of production for bulk drugs. Exploiting the benefits arising due to optimization of resources and economies of scale is the next step.

The scheme is to be implemented through a one-time grant-in-aid. The purpose of the grant, the official said, is to render financial assistance for the establishment of common facilities in any upcoming bulk drug park promoted by the state governments or state corporations.

The maximum limit for the grant-in-aid would be $14.64 million per bulk drug park. As for the Common Facility Centers, the maximum limit for the grant-in-aid under this category would be $2.93 million per cluster.

Another scheme proposed is for the assistance of cluster development. The scheme is termed as cluster development program for the pharma sector, and will be a central sector scheme. The total size of the scheme is proposed at $2.93 million for 2018-2020.

This would be implemented on a public-private partnership format through a one-time grant-in-aid to be released in various phases for the creation of identified infrastructure and common facilities.

The pharmaceutical promotion development scheme will also aim at the promotion, development and export promotion in the pharmaceutical sector.

A budgetary allocation of $21 million for 2018-2020 has been made for the Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS).

The official added it is possible to extend the benefit of interest subvention to around 250 SMEs under the scheme.

SME scheme
The PTUAS sub-scheme is aimed at providing interest subvention to eligible SME pharma units having GMP compliant manufacturing facilities both for bulk drugs and pharmaceutical formulations.

Eligible units intending to upgrade their manufacturing infrastructure to attain WHO-GMP norms, have to secure a loan from any financial institution to upgrade their infrastructure and technology. The goal of this scheme is to facilitate SMEs of proven track records, and to enable them to participate and compete in the global market and earn foreign exchange.

Almost 75% pharma SMEs are purely manufacturing companies with their own facilities, and around 13% companies are engaged in manufacturing as well as trading.

Of these, 10.5% companies are doing R&D work, both clinical tests as well as contract research, along with manufacturing. Around 50% of these pharma SMEs are engaged in exports to various countries around the world, including the USA and Europe.

Pharma exports

The Indian government is keen that the pharmaceutical sector looks for new markets. Minister of Commerce and Industry Suresh Prabhu said government is committed to giving access to the sector in key global markets.

Emphasizing the need to reach out to newer markets, especially in Africa where affordability of drugs is a key issue, Mr Prabhu said the Indian drug industry could well address the problem with its generic drugs.

Asking drugmakers to increase R&D investments, Mr Prabhu also called on companies to find ways to make healthcare more affordable to people by reducing costs.

Stating that regions like Latin America and Africa hold huge export potential for Indian pharmaceutical products, Mr Prabhu said "the pipeline for new medicines should not get dry."

Speaking at a pharma exhibition, Mr Prabhu also assured global pharmaceutical players and regulators about the quality and affordability of Indian drugs. He added the government is committed to promoting pharma exports to China, as well as to other untapped markets.

With China agreeing to a high-level bilateral round table meeting, Mr Prabhu said it would clear the way for Indian companies to get greater market access and penetration in China.

The USA accounted for 31% of India's $17.27 billion pharma exports in 2017-18. India also has the highest number of US Food and Drug Administration approved plants outside the USA.

API development

Eager to reduce dependence on China, India's chemicals and fertilizers ministry has joined hands with other ministries to draw up a road-map for increasing active pharmaceutical ingredient (API) production in India. A high-level task force has been constituted to study global practices and draw up a plan aimed at boosting domestic production of APIs.

Currently, over 60% of APIs are sourced from other nations. For some specific APIs, the dependence is over 80%-90%, according to the DoP.

India continues to rely on imports of key starting materials, intermediates and APIs from China, with the share of dependence increasing over time. This potentially exposes the country to raw material supply disruptions and pricing volatility.

With the government keen to increase India's pharmaceutical exports to China, the Department of Commerce in coordination with the Embassy of India at Beijing commissioned a study on 'Enhancing Indian Exports of Pharmaceutical products to China'.

China's healthcare sector continues to grow rapidly with spending projected to grow from $357 billion in 2011 to $1 trillion in 2020, the study adds.

https://www.thepharmaletter.com/article/indian-government-plans-to-foster-smes-and-bulk-drug-industry