Investment Opportunities in APIs-KSMs-Drug Intermediates Bulk Drug Industries. Cabinet Approves Promotion of Domestic Manufacturing of Critical Key Starting Materials-Drug Intermediates and Active Pharmaceutical Ingredients in the Country.
Key Starting Materials (KSMs)/Drug Intermediates
KSMs from the essential medicines list for strategic reasons posed by the COVID-19.
Role of Government towards (KSMs)/Drug Intermediates
The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi has approved the following schemes:
The scheme on Promotion of Bulk Drug Parks for financing Common Infrastructure Facilities in 3 Bulk Drug Parks with financial implication of Rs. 3,000 crore for next five years.
Production Linked Incentive (PLI) Scheme for promotion of domestic manufacturing of critical KSMs/Drug Intermediates and APIs in the country with financial implications of Rs6, 940 crore for next eight years.
Details:
Promotion of Bulk Drug Parks
· Decision is to develop 3 mega Bulk Drug parks in India in partnership with States.
· Government of India will give Grants-in-Aid to States with a maximum limit of Rs. 1000 Crore per Bulk Drug Park.
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· Parks will have common facilities such as solvent recovery plant, distillation plant, power & steam units, common effluent treatment plant etc.
· A sum of Rs. 3,000 crore has been approved for this scheme for next 5 years.
· Related Projects: - Pharmaceutical, Drugs, Fine Chemicals, Bulk Drug Intermediates,
Production Linked Incentive Scheme
· Financial incentive will be given to eligible manufacturers of identified 53 critical bulk drugs on their incremental sales over the base year (2019-20) for a period of 6 years.
· Out of 53 identified bulk drugs, 26 are fermentation based bulk drugs and 27 are chemical synthesis based bulk drugs.
· Rate of incentive will be 20 % (of incremental sales value) for fermentation based bulk drugs and 10% for chemical synthesis based bulk drugs.
· A sum of Rs. 6,940 crore has been approved for next 8 years.
Impact:
Promotion of Bulk Drug Parks:
The scheme is expected to reduce manufacturing cost of bulk drugs in the country and dependency on other countries for bulk drugs.
Production Linked Incentive Scheme:
· The scheme intends to boost domestic manufacturing of critical KSMs/Drug Intermediates and APIs by attracting large investments in the sector to ensure their sustainable domestic supply and thereby reduce India's import dependence on other countries for critical KSMs/Drug Intermediates and APIs.
· It will lead to expected incremental sales of Rs. 46,400 crore and significant additional employment generation over 8 years.
Implementation:
Promotion of Bulk Drug Parks
The scheme will be implemented by State Implementing Agencies (SIA) to be set up by the respective State Governments and the target is to set up 3 mega Bulk Drug Parks.
Production Linked Incentive Scheme
The scheme will be implemented through a Project Management Agency (PMA) to be nominated by the Department of Pharmaceuticals. The Scheme will be applicable only for manufacturing of 53 identified critical bulk drugs (KSMs/Drug Intermediates and APIs).
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Benefits:
· Common infrastructure facilities would be created with the financial assistance under the sub-scheme in 03 Bulk Drug Parks.
· It is expected to reduce manufacturing cost and dependency on other countries of Bulk Drug in the country.
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List of Critical KSMs/Drug Intermediates and APIs
Fermentation Based 04 KSMs/Drug Intermediates and Corresponding APIs
1. Penicillin G/6-Amino Penicillinc Acid (6-APA)
2. Cephalosporin C/7-Amino Cephalosporanic Acid (7-ACA)
3. Erythromycin Thiocyanate/TIOC
4. Potassium Clavulanate
Fermentation Based 10 Niche KSMs/Drug Intermediates and Corresponding APIs
1. Cyclins (Tetracycline, Oxycycline, Doxyxcline)
2. Aminoglycosides (Gentamycin)
3. Aminoglycosides (Neomycin)
4. Aminoglycosides (Streptomycin)
5. Steroids (Betamethasone)
6. Steroids (Dexamethasone)
7. Steroids (Prednisolone)
8. Anti TB (Rifampicin)
9. Vitamins and Nutraceuticals (Vitamin B6)
10. Vitamins and Nutraceuticals (Vitamin B1)
Chemical Synthesis Based 04 KSMs/Drug Intermediates and Corresponding APIs (with backward integration)
1. Dicyandiamide (DCDA)
2. Para-aminophenol
3. 2-Methyl -5 Nitro- Imidazole (2-MNI) including Imidazoles.
4. 1, 1 Cyclohexane Diacetic Acid (CDA)
Other Chemical Synthesis Based 23 KSMs/Drug Intermediates and Corresponding APIs (with backward integration)
1) Levofloxacin
2) Sulfadiazine
3) Ciprofloxacin
4) Ofloxacin
5) Norfloxacin
6) Artesunate
7) Telmisartan
8) Losartan
9) Valsartan
10) Olmesartan
11) Atorvastatin
12) Acyclovir
13) Lopinavir
14) Ritonavir
15) Oxcarbazepine
16) Carbamazepine
17) Levodopa
18) Carbidopa
19) Levetiracetam
20) Aspirin
21) Diclofenac Sodium
22) Tinidazole
23) Ornidazole
Market
The Indian pharmaceutical industry is the 3rd largest in the world by volume. However, despite this achievement, India is significantly dependent on the import of basic raw materials, viz., Bulk Drugs that are used to produce medicines. In some specific bulk drugs the import dependence is 80 to 100%.
The government has plans to put in place a production-linked incentive (PLI) scheme to boost domestic manufacturing of critical key starting materials (KSMs) or drug intermediates, used to make bulk drugs, as well as APIs. That PLI could cost $911.5 million over the next eight years.
India imports 53 APIs and KSMs from China. According to the Trade Promotion Council of India (TCPI), India imports 70% of its API requirements from China, mostly antibiotics and vitamins. In 2018-19, Indian pharma companies imported bulk drugs and intermediates worth $2.4 billion from China.
The Indian pharmaceutical market should grow from nearly $34.3 billion in 2020 to more than $45 billion by 2025 million.
Quantum of Incentive
The fermentation based eligible, incentive for first four years (2022-2023 to 2025-2026) would be 20%, for fifth year (2026-27) incentive would be 15% and the sixth year (2027-2028) incentive would be 5%; on incremental sale of KSMs/Drug Intermediates/APIs.
For chemically synthesis eligible products, incentive for five years (2021-2022 to 2025-2026) would be 10% on incremental sales of KSMs/Drug Intermediates/APIs.
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