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A SELF-RELIANT PHARMA INDUSTRY
What the article is about?
- Talks about the Pharma industry and measures to make it a self-reliant one.
Syllabus: GS-III Changes in industrial policy and their effects on industrial growth
Pharmaceutical industry:
- India is the world's third-largest pharmaceutical producer and is considered 'pharmacy to the world’.
- It is the largest provider of generic drugs globally.
- The Indian pharmaceutical industry meets over 50% of global demand for various vaccines, 40% of generic demand in the U.S. and 25% of all medicine in the U.K.
- The Indian pharmaceutical industry is a strategic industry for the nation, with the advantage of scale (at $37 billion in 2019-20, it contributed 1.5% to the GDP directly, with another 3% coming indirectly).
- The industry also has a global reach and is a net foreign exchange earner of more than $10 billion annually.
- More than half the turnover of this industry is from exports.
Phase-I PLI scheme for Pharma Industry :
- Based on the strategy of “Atmanirbhar Bharat”, to enhance India’s manufacturing capabilities by increasing investment and production in the sector and contributing to product diversification to high-value goods in the pharmaceutical sector.
- Benefits of PLI in Pharmaceuticals:
- Reduced Dependency on China:
- The pharmaceutical industry here is currently dependent on China for nearly 70% of the bulk drugs it imports.
- Enhance Exports:
- The country contributes 3.5% of total drugs and medicines exported globally.
- Reduced Dependency on China:
- Areas of modification for PLI scheme:
- Achieving price competency in production:
- To incentivise investment in production in India, production costs need to be cheaper than the cost of imports.
- Need a technology component within the scheme:
- Technology plays a crucial role in reducing import dependence, manufacturing APIs/DIs/KSMs.
- Utilising existing but in-operational or underutilised facilities for production.
- Significance of an industrial policy in tandem with trade and science and technology policies.
- Include smaller firms/MSMEs within the focus of PLI
- PLI Phase-I focused on large firms
- Nearly 3/4 of the production of pharmaceuticals in India is by MSMEs.
- Public sector enterprises should be tasked with the production of APIs/DIs/KSMs, that are not much focused by private players.
- Achieving price competency in production:
