Lok Sabha Question No. 333 (UNSTARRED), answered on 2023-02-03
Subject: Domestic Pharmaceutical Companies
Ministry: CHEMICALS AND FERTILIZERS
Asked by: S. Jagathrakshakan

## GOVERNMENT OF INDIA MINISTRY OF CHEMICALS AND FERTILIZERS DEPARTMENT OF PHARMACEUTICALS

LOK SABHA UNSTARRED QUESTION No. 333 TO BE ANSWERED ON THE 3 rd  February, 2023

## Domestic Pharmaceutical Companies

## 333. SHRI S. JAGATHRAKSHAKAN:

Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:

- (a)  whether  the  domestic  pharmaceutical  companies  are  expected  to  report  steady  revenue growth of 6-8 per cent in FY2023 and FY2024; and
- (b)  if  so,  the  details  thereof  alongwith  the  initiatives  that  are  proposed  to  be  taken  by  the Government keeping in view the fact that the domestic pharmaceutical industry continues to grapple with cost inflation and pricing pressures?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF CHEMICALS & FERTILIZERS (SHRI BHAGWANTH KHUBA)

- (a):     The  department  does  not  maintain  projections  of  annual  revenues  of  pharmaceutical companies. However, the growth in average annual turnover of Pharmaceuticals for the last three years is estimated to be about 9%.
- (b):    The Department of Pharmaceuticals is implementing the following schemes to support domestic manufacturing of pharmaceuticals in the country:
- i. Under  the  Production  Linked  Incentive  (PLI)  Scheme  for  promotion  of  domestic manufacturing of critical Key Starting Materials (KSMs)/ Drug Intermediates (DIs) and Active Pharmaceutical Ingredients (APIs) in India, with a financial outlay of Rs. 6,940 crores and the tenure from FY 2020-2021 to FY 2029-30, the financial incentives are to be provided for 41 identified products. Out of these, 21 projects have already been commissioned.
- ii. Production Linked Incentive Scheme for Pharmaceuticals, with a financial outlay Rs. 15,000 crores and the tenure from FY 2020- 2021 to FY 2028-29, provides for financial incentives to 55 selected applicants for manufacturing of identified products under three categories for a period of six years. The eligible drugs under this scheme include APIs among other categories of pharmaceutical products.
- iii. Scheme for Promotion of Bulk Drug Parks, with a financial outlay of Rs. 3,000 crores and the tenure from FY 2020-2021 to FY 2024-25, provides for financial assistance for creation of common infrastructure facilities to three States which have been selected under the scheme viz Gujarat, Himachal Pradesh and Andhra Pradesh. The industrial units setting up plants for APIs in these Parks will get benefitted from the common
- infrastructure developed under the scheme, which will decrease the manufacturing cost and increase their competitiveness.
- iv. The  Department  is  implementing  the  scheme  of Strengthening  of  Pharmaceutical Industry (SPI) , with a financial outlay of Rs. 500 crores and the tenure from FY 20212022 to FY 2025-26 to provide infrastructure support for pharma MSMEs in clusters and to address the issues of technology upgradation of individual pharma MSMEs

Further,  the  National  Pharmaceutical  Pricing  Authority  (NPPA)  revises  the  ceiling prices  of  scheduled  medicines  annually  on  the  basis  of  Wholesale  Price  Index  (WPI)  for preceding  calendar  year  on  or  before  1st  April  of  every  year,  which  is  notified  by  the Government on the 1st day of April every year (The WPI increase is the maximum increase permissible and may or may not be availed by the manufacturers). It is further clarified that prices are increased or decreased by the manufacturers based on market dynamics. In case of non-scheduled  formulations,  the  manufacturer  can  increase  the  MRP  upto  10%  during  the preceding twelve months.

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