The Government approved a production linked incentive scheme for the Pharmaceutical sector entailing an outlay of Rs 15000 crores. This is besides the PLI scheme for the API sector. The duration of the scheme will be from 20-21 to 28-29. More outlay could be allocated if needed. The PLI scheme is further expected to promote innovation for development of complex and high tech products including emerging therapies and in vitro diagnostic services as also self-reliance in important drugs.
One of the further objectives of the scheme is to create global champions out of India who have the potential to grow in size and scale using cutting edge technology and thereby penetrate global value chains.
The company registered in the country will be divided across three groups based on their global manufacturing revenue to ensure wider applicability of the schemes across the Pharmaceutical industry and at the same time meet the objectives of the scheme.
The Group A would comprise entities having Global Manufacturing revenue of Pharma goods more than or equal to Rs 5000 crores. The incentive allocated to such applicants is Rs 11000 crores.
The Group B would comprise entities having GMR between Rs 500-4999 crores and would be entitled for incentives worth Rs 2250 crores.
The Group C would comprise entities having GMR less than Rs 500 crores and would be entitled for incentives worth Rs 1750 crores.
Big guys are going to get bigger and naturally they will be able to take advantage of the scheme and grow in size. The scheme shall also cover pharmaceutical goods under three categories. Biopharmaceuticals, complex generic drugs, patented drugs among others have been clubbed in the first category, while active pharmaceutical ingredients and autoimmune drugs, anti-cancer drugs, anti-diabetic drugs are part of the second and third categories respectively. The rate of incentive will be 10 per cent (of incremental sales value) for Category 1 and Category 2 products for the first four years, 8 per cent for the fifth year and 6 per cent for the sixth year of production under the scheme. Besides, the rate of incentive will be 5 per cent (of incremental sales value) for Category 3 products for the first four years, 4 per cent for the fifth year and 3 per cent for the sixth year of production under the scheme.