Pharmaceutical companies have raised concerns over some aspects of the government’s production-linked incentive (PLI) scheme for drugs, which intends to lower dependence on raw material from China.
Representatives of the pharmaceutical industry will make a presentation to the Department of Pharmaceuticals and Central Drugs Standard Control Organisation (CDSCO), Mint reported.
"There are certain challenges and issues that the pharma industry is facing with the scheme such as the applicant should have a minimum net worth, including group companies; 30 percent of proposed investment is eligible to apply for incentives; and non-allowance of brownfield category. The scheme should also allow existing manufacturers with some incentives," the report qouted BR Sikri, Chairman, ABS Mercantile, as saying.
Only 'greenfield' investments, or funding of new facilities, are eligible under the scheme.
"There is 65 percent of sale price marking in the scheme. The threshold investment should not be treated as double and this needs to get reconsideration. Maximum incentive per eligible product and per selected applicant need justifications on investment versus return," Sikri added.
The Department of Pharmaceuticals said the PLI scheme, notified in July, intends to boost local manufacturing of identified key starting materials (KSMs), drug intermediates (DIs) and active pharmaceutical ingredients (APIs).
Financial incentives under the PLI scheme are awarded based on sales made by selected manufacturers for 41 products.
The Department of Pharmaceuticals and CDSCO said they are open to making modifications in the scheme after discussions with the industry, the report stated.
"For the PLI scheme for bulk drugs around Rs 7,160 crore have been sanctioned. The government does not want players who are not interested but are still making an application without any financial back up, which is the reason for setting up the minimum investment threshold, else the scheme will fail," S Eswara Reddy, Joint Drug Controller, CDSCO told the paper.