Govt launches Rs 5K cr R&D scheme for pharma, medtech

The Centre on Tuesday launched a Rs 5,000 crore scheme to promote R&D in the pharmaceuticals and medical technology sectors including a programme to fund more than Rs 1100 crore in nine pharma companies for carrying out research in six priority areas in collaboration with academic institutions.

In addition, the scheme will entail spending Rs 3,000 crore to commercialise 30 R&D products and opening up seven Centres of Excellences on pharmaceutical research in existing National Institutes for Pharmaceutical Education and Research.

Unveiling the National Policy on Research & Development and Innovation in the Pharma-Med Tech Sector here, Union Health Minister Mansukh Mandaviya said the domestic pharmaceutical companies invested less on research and development when compared to multinational companies.

"Multinational companies spend 20-25% of their profits in research and innovation while for Indian companies the average is around 10%. Till the time we don’t come out with research-led innovative products, we cannot lead the segment globally," said Mandaviya, who is also in charge of the Department of Pharmaceuticals, while unveiling a new policy to support the scheme.

Nine established pharma companies willing to carry out research in six priority areas will be selected by the government to implement the programme.

The firms will use the research infrastructure available at national institutes but in exchange they will have to provide training to a selected number of students and scientists of the institutes working on the identified areas.

The six priority areas are new chemical entities, complex generics including biosimilars, medical devices, stem cell therapy, orphan drugs and antimicrobial resistance.

Investments made by the companies on the projects at the institutes would be backed up with financial support at the rate of 35% of the total cost incurred or 125 crore whichever is less on milestone basis over a period of five years.

While the Indian pharmaceutical industry is the third largest in the world by volume with current market size of around $ 50 billions, a major component of Indian exports are low value generic drugs while a large proportion of the demand for patented drugs is met through imports. This is because the Indian pharmaceutical sector lacks in high value production along with world class pharma R&D.

Another component of the scheme is to expedite the market launching and large-scale commercialization of products or technologies in priority areas having high commercial potential or societal impact by providing a financial assistance of up to Rs 100 crore for 30 projects in six priority areas.

As many as 125 start-ups, MSME or small scale units will also be provided with a funding of Rs one crore each if they are working on projects in any of the six priority areas. Setting up of seven Centres of Excellence will cost Rs 700 crore.

"India can achieve self-reliance in pharmaceuticals and medical devices only by strengthening its research and development infrastructure that would drive the expansion of access to life-saving medicines and drugs,” Mandaviya said.