Touted as the cornerstone of the government’s push for achieving self-reliant India, the Production Linked Incentive (PLI) scheme comes across as a game-changer for the pharmaceutical sector which despite exporting products to over 200 countries continue to import high-end drugs to fulfill domestic requirements.

To reduce import dependence in critical bulk drugs such as Key Starting Materials (KSM) or Drug Intermediates (DI) and Active Pharmaceutical Ingredients (API), the Department of Pharmaceuticals has launched a PLI Scheme for promotion of domestic manufacturing by setting up greenfield plants with minimum domestic value addition in four different target segments. In two fermentation segments with at least 90% and in two chemical synthesis-based segments with at least 70%, totaling 41 products with a total outlay of Rs. 6,940 crore for the period 2020-21 to 2029-30.

On April 13, 2021, approvals have been accorded to 16 applicants under PLI scheme in the country. The setting up of 16 new plants will lead to total committed investment of Rs. 348.70 crore and employment generation of about 3,042 people by the companies. The commercial production of these plants is projected to commence from 1st April, 2023 onward.

In total, 215 applications have been received for the 36 products spread across the four target segments. Out of these, 47 applications have been approved by the government, with a total committed investment of Rs. 5,400 crore. The maximum incentive proposed for disbursement is Rs. 6,000 crore and the expected employment generation is for about 12,140 people. The expected outcomes in terms of increase in incremental sales, exports, investments, and employment under the scheme (cumulative over a period of 6 years) is Rs. 294,000 crore, Rs. 196,000 crore, Rs. 15,000 crore and 100,000 jobs respectively.

In the PLI scheme for bulk drugs, the major participants include Aurbindo Pharma Group, Hetero Group, Karnataka Antibiotics and Pharmaceuticals, Kinvan, and Natural Biogenex etc. These include global players with a strong presence in advanced markets.

Similarly, the PLI scheme for the Medical Devices sector aims to ensure a level playing field for the domestic manufacturers of medical devices with a total financial outlay of Rs. 3,420 crore. for the period 2020-21 to 2027-28. The major successful players include Siemens Healthcare, Wipro GE Healthcare, BPL Medical Technologies, Nipro India, Sahajanand Medical Technologies, Integris Health and Poly Medicure. In total, 28 applications have been received spread across the 4 target segments from all over the country. Out of these, 14 applications have been approved by the government, with a total committed investment of Rs. 873.93 crore. The maximum incentive proposed for disbursement is Rs. 1,694 crore and the expected employment generation is for about 4,212 people.

Dr. Dinesh Dua, Chairman, Pharmaexcil (Pharmaceutical Export Promotion Council of India) says the incentive between 10% to 20% is solely for promotion of domestic manufacturing and intends to create a strong market in the next 3-4 years. Dua is confident that India will soon emerge self-sufficient. He explains his optimism, “The PLI schemes that are in the process cover generics, expedients, and a lot of things. With Rs. 15,000- Rs. 16,000 crore investments, we have just made the beginning. In fact, the government is prepared for third PLI scheme as well. We must explore the enormous innovation potential of academia just like the United States where the majority of novel molecules come from universities.” 

As per Dr. Girish Dixit, President & Executive Director, EISAI Pharmaceuticals, the integration of scientific capabilities across the board is necessary to meet the expectations. “We need to generate trust. While the 'Vocal for Local' call is good, we need to secure global interests as well. We should come out of a generic mindset and explore what we shall be in the next 2-3 years. We must focus on reverse innovation.”

The IBEF report predicts the growth of Indian pharmaceutical sector, the 3rd largest in the world by volume to US $100 billion by FY 2025. The export of pharma products including bulk drugs, intermediates, drug formulations, biologicals, Ayush and herbal products from India stood at US $16.3 billion during FY 2020.