60 Small Drug Makers Join Govt Scheme To Modernise Pharma Manufacturing Units

New Delhi: Sixty small drug manufacturers have enrolled in a government scheme aimed at modernising their units to align with global good manufacturing practices (GMP), according to a report by the Mint. This initiative follows a series of incidents where Indian pharmaceuticals were found to be toxic in regions such as North America, Africa, and Central Asia, leading to fatalities and raising serious questions about Indian pharma exports.

Throughout 2023 several countries alleged that cold-medication and syrups exported from India were tainted with toxic chemicals. The World Health Organization (WHO) has issued several alerts over the year about Indian medicines containing diethylene glycol (DEG) or ethylene glycol (EG) above the recommended safe limit of 0.10 per cent. As a result, the Government of India launched probes into firms linked to related cases and various initiatives to bring Indian pharmaceuticals to global standards.

The revamped pharmaceuticals technology upgradation assistance scheme, or RPTUAS, was announced by the Ministry of Chemicals and Fertilisers in March of this year. It has been designed to support the modernisation of existing pharma units. It is part of a broader effort to comply with revised standards mandated by the Drugs and Cosmetic Act.

These revisions require companies to adhere to the WHO-recommended GMP.

Among the 60 firms that have signed up, over 30 have already commenced upgrading their facilities under the RPTUAS. Additionally, the government is actively encouraging more micro, small and medium enterprises (MSMEs) to participate in the scheme, highlighting the financial incentives available to assist in upgrading manufacturing standards.

The scheme’s eligibility now includes any pharmaceutical manufacturing unit with a turnover of less than Rs 500 crores, beyond just MSMEs. Preference is still given to MSMEs, supporting smaller players in achieving high-quality manufacturing standards.

Flexible financing options

The scheme introduces flexible financing options, emphasising subsidies on a reimbursement basis over the traditional credit-linked approach. This flexibility is designed to diversify the financing options for participating units, facilitating broader adoption of the scheme.
The revised scheme also allows integration with state government schemes, enabling units to benefit from additional top-up assistance.
Financial incentives under RPTUAS
Pharma companies with an average revenue of less than Rs 500 crore over the past three years are eligible for incentives, structured as follows:
  • Firms with revenue less than Rs 1 crore: 20 per cent of investments, up to a max of Rs 1 crore per unit.
  • Firms with revenue between Rs 1 crore and less than Rs 50 crore: 20 per cent of investments.
  • Firms with revenue between Rs 50 crore and less than Rs 250 crore: 15 per cent of investments.
  • Firms with revenue between Rs 250 crore and less than Rs 500 crore: 10 per cent of investments.
Eligible activities include improvements such as heating, ventilation, and air conditioning (HVAC) systems, water and steam utilities, testing laboratories, stability chambers, clean room facilities, effluent treatment, and waste management, ensuring comprehensive support for participating units.

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