This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our PRIVACY POLICY for more information on the cookies we use and how to delete or block them.

Bulk Drug Parks

12 June 2020

The Ministry of Chemicals and Fertilizers (Department of Pharmaceuticals), Government of India has introduced a scheme for promotion of Bulk Drug Parks (BDP), vide notification no:31026/16/2020-Policy dated 02 June 2020[1], through a one-time, grant-in-aid to be released in various phases for creation of ‘Common Infrastructure Facilities’ in BDPs to a State implementation Agency (SIA). The broad contours of the scheme are provided below.

Overview of Scheme:

  • The scheme has been announced by the Government of India in order to promote Pharmaceuticals Industry by ensuring un-interrupted supply of quality Active Pharma Ingredients (API) and to upscale manufacturing to meet emergencies and guaranteeing availability of drugs at affordable prices.
  • In the year 2018, a sub-scheme called “Assistance to Bulk Drug Industry for Common Facility Centre” under the umbrella scheme of “Development of Pharmaceutical Industry”, was introduced. Under the sub-scheme, financial assistance was envisaged to be provided for creation of identified common infrastructure facilities in BDPs promoted by the state government. They took-off slowly as the maximum limit for financial support was capped at INR 1 Bio., with overall outlay of INR 2 Bio.
  • The said scheme is proposed to be revised to provide adequate funds to the proposed BDPs and thereby bring-down the manufacturing cost significantly to create a robust ecosystem for bulk drugs manufacturing in the country.

Financial Assistance

  • The scheme proposes to provide grants in-aid to 3 BDPs with a maximum limit of INR 10 Bio. per BDP or 70% of the project cost of common infrastructure facilities, whichever is less.
  • In case of hilly states and North East region, the grant in-aid would be INR 10 Bio. per BDP or 90% of the project cost of Common Infrastructure facilities, whichever is less.
  • The assistance under the scheme will be admissible for creation of common infrastructure facilities by the state government in BDPs.
  • Total outlay under the scheme is capped at INR 30 Bio for 3 BDPs.

Key Pointers

  • The Aid will not be utilised towards land and building components of the project
  • Assistance under the proposed scheme will be admissible for creation of Common Infrastructure Facilities such as Solvent recovery and Distillation Plant, Central Effluent Treatment Plants, Captive Power plants, Steam and Cooling systems, Incubation facilities, Common Logistic facilities, Advance Common Testing centre, Regulatory awareness facility centre, Emergency Response centre, etc.
  • The tenure of the Scheme will be for the period 2020-21 to 2024-25
  • The Scheme would be implemented through a one-time grant-in-aid to be released in various phases for creation of Common Infrastructure facilities in BDP to a SIA
  • The Scheme Steering Committee (SSC) in the Department of Pharmaceuticals (DoP) shall approve the project components and funding thereof depending upon the merits of the proposal

BDO Comments

This is a step in the right direction by the Union Government. There has been a demand for the government to play a larger role in order to drive access to health care through long range activities. This measure would encourage domestic players to maintain confidence and not be affected by the development in the external market, especially in the current environment where there is tremendous pressure on national governments to be self-sufficient in the area of health care needs of citizens, while positioning itself to capitalise on the demands of the international market. It is expected that the government would deepen the penetration and allocate more resources to this all-important sector in the coming times.

[1] There are two notifications with same number and date – other notification covers Production Linked Incentive for Pharma Sector manufacturing KSM/DI/APIs