Govt tweaks PLI schemes for pharma and medical devices

The Department of Pharmaceuticals, which is part of the Ministry of Chemicals and Fertilisers, on Thursday tweaked its earlier-announced production linked incentive (PLI) schemes for indigenously produced bulk drugs and medical devices as per suggestions received from industry and also extended its deadline by one week to November 30, an official statement said.

In March this year, the government announced two PLI schemes for encouraging domestic production of active pharmaceutical ingredients (API) and medical devices.

The government replaced the term ‘minimum threshold’ investment with ‘committed’ investment, taking into account availability of technology choices which varies from product to product. The net worth of the firm on the date of application should not be less than 30 per cent of the committed investment. Under the scheme for bulk drugs, as many as 53 active pharmaceutical ingredients used for making 41 drugs including penicillin G, Atorvastatin, Telmisartan, Diclofenac Sodium and many vitamin supplements are covered.

Exports too covered

In the revised guidelines, the department also deleted the earlier provision that only domestically sold products are eligible for incentives and decided to cover even exports.

The new guidelines also revised the minimum annual production capacity required for becoming eligible for the scheme for products such as Tetracycline, Neomycin, Para Amino Phenol (PAP), Meropenem, Artesunate, Losartan, Telmisartan, Acyclovir, Ciprofloxacin and Aspirin.

Under the PLI scheme for bulk drugs, those projects that intend to produce fermentation-based products will get 20 per cent incentive for four years beginning 2023-24 and it will subsequently taper off to 15 per cent and 5 per cent, respectively in the next two years. For those engaged in manufacturing chemically synthesised bulk drugs, the incentive scheme commences a year early from 202-23, even though it also runs for six years during which the firms will get 10 per cent incentive annually.

Similarly, in the PLI scheme for promoting domestic manufacturing of medical devices, the word ‘minimum threshold’ investment was replaced with ‘committed’ investment by the selected applicant.

The tenure of the scheme has been extended by one year, keeping in view the capital expenditure expected to be done by the selected applicants in FY 2021-22. Accordingly, sales for the purpose of availing incentives will be accounted for 5 years starting from FY 2022-2023 instead of FY 2021-2022, the statement said.

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