{"id":167311,"date":"2022-02-08T20:39:39","date_gmt":"2022-02-08T15:09:39","guid":{"rendered":"https:\/\/blog.forumias.com\/?page_id=167311"},"modified":"2022-02-08T20:39:39","modified_gmt":"2022-02-08T15:09:39","slug":"answered-describe-the-significance-of-indigenisation-of-the-pharmaceutical-industry-for-the-health-care-and-economy-of-india-how-far-production-linked-incentive-scheme-for-the-pharma-sector-has-bee","status":"publish","type":"page","link":"https:\/\/forumias.com\/blog\/answered-describe-the-significance-of-indigenisation-of-the-pharmaceutical-industry-for-the-health-care-and-economy-of-india-how-far-production-linked-incentive-scheme-for-the-pharma-sector-has-bee\/","title":{"rendered":"[Answered] Describe the significance of indigenisation of the pharmaceutical industry for the health care and economy of India. How far production-linked incentive scheme for the Pharma sector has been able to forward this objective?"},"content":{"rendered":"<table style=\"border-collapse: collapse; width: 100%;\">\n<tbody>\n<tr>\n<td style=\"width: 100%;\"><b><span data-contrast=\"none\">Introduction: <\/span><\/b><span data-contrast=\"none\">Briefly provide overview of pharmaceutical industry in India.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:259}\"><br \/>\n<\/span><b><span data-contrast=\"none\">Body: <\/span><\/b><span data-contrast=\"none\">Write about significance<\/span> <span data-contrast=\"none\">of indigenization of the pharmaceutical industry for the health care and economy of India. Write about the features,\u00a0issues and solutions associated with the PLI scheme.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:259}\"><br \/>\n<\/span><b><span data-contrast=\"none\">Conclusion: <\/span><\/b><span data-contrast=\"none\">Briefly provide a way forward.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:259}\">\u00a0<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span data-contrast=\"none\">India is known as <\/span><b><span data-contrast=\"none\">pharmacy of the world<\/span><\/b><span data-contrast=\"none\">. India is the world&#8217;s largest supplier of generic medications. It accounts for 20% of the worldwide supply by volume and supplying about 60% of the global vaccination demand.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">However, Indian pharmaceutical industry is<\/span><b><span data-contrast=\"none\"> heavily dependent on imports<\/span><\/b><span data-contrast=\"none\">. For example, 80% Active Pharmaceutical Ingredients (APIs) are imported from China.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Significance of indigenization of pharmaceutical industry in India.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><strong>Significance for healthcare in India.\u00a0<\/strong><\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"2\"><span data-contrast=\"none\">India produces about 95% of its own bulk consumption. But it\u00a0is <\/span><b><span data-contrast=\"none\">highly<\/span><\/b> <b><span data-contrast=\"none\">dependent on imports. Any supply disruption from exporting country can create supply side constraints<\/span><\/b><span data-contrast=\"none\"> for healthcare supplies in India. Which the country has experienced during Covid-19.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"2\"><span data-contrast=\"none\">Indian population needs <\/span><b><span data-contrast=\"none\">low priced\u00a0medicines, as out of pocket expenditure is already very high<\/span><\/b><span data-contrast=\"none\">. However, the prices of imports are out of India\u2019s control which can create issues in case of price volatility of imports.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"3\" data-aria-level=\"2\"><span data-contrast=\"none\">To <\/span><b><span data-contrast=\"none\">meet the growing demand of medicine<\/span><\/b><span data-contrast=\"none\"> with increase in population and rise of Non communicable diseases. India needs self-sufficiency.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"1\"><strong>Significance for Indian Economy.\u00a0<\/strong><\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"4\" data-aria-level=\"2\"><span data-contrast=\"none\">Pharmaceutical sector is <\/span><b><span data-contrast=\"none\">a sunrise sector where India can have comparative advantage<\/span><\/b><span data-contrast=\"none\">. In the year 2019-2020, Pharmaceutical sector contributed approx. 1.5% to GDP and another 3% indirectly, it has potential to contribute much more.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"5\" data-aria-level=\"2\"><b><span data-contrast=\"none\">More than half of this industry\u2019s turnover comes from exports<\/span><\/b><span data-contrast=\"none\">. India supplies generic medication to the whole world, especially to Sub-Saharan countries. which earns significant FOREX for the economy. while good amount of FOREX is spent for raw materials imported.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"6\" data-aria-level=\"2\"><span data-contrast=\"none\">To <\/span><b><span data-contrast=\"none\">induce and maintain investor confidence <\/span><\/b><span data-contrast=\"none\">India needs self-sufficiency in pharmaceutical sector.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"7\" data-aria-level=\"2\"><span data-contrast=\"none\">Indigenized pharmaceutical sector will <\/span><b><span data-contrast=\"none\">incentivize greater investment in R&amp;D<\/span><\/b><span data-contrast=\"none\"> which further reduce prices of medicine and increase competitiveness of Indian products.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span data-contrast=\"none\">To address import dependence on API (Active pharmaceutical ingredients), DI (Drug Intermediates) and KSM (Key Starting material) government launched <\/span><b><span data-contrast=\"none\">PLI (Production Linked Incentive) Scheme for pharmaceutical sector<\/span><\/b><span data-contrast=\"none\">. Salient Features of the scheme.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"3\" data-aria-level=\"1\"><span data-contrast=\"none\">To<\/span><b><span data-contrast=\"none\"> enhance India\u2019s manufacturing capabilities<\/span><\/b><span data-contrast=\"none\"> by increasing investment and production in the sector.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"4\" data-aria-level=\"1\"><span data-contrast=\"none\">To <\/span><b><span data-contrast=\"none\">create global champions out of India<\/span><\/b><span data-contrast=\"none\"> who have the potential to grow in size, thereby penetrate the global value chains.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"5\" data-aria-level=\"1\"><b><span data-contrast=\"none\">Financial incentives for the incremental sales<\/span><\/b><span data-contrast=\"none\"> (over Base Year) of pharmaceutical goods and in-vitro diagnostic medical devices. The total quantum of the incentive for the scheme is Rs 15,000 crore.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"none\">However, the PLI scheme could achieve expected results. The scheme faced several inefficiencies which need to be addressed.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"6\" data-aria-level=\"1\"><b><span data-contrast=\"none\">Price competency:<\/span><\/b><span data-contrast=\"none\"> Chines imports are 20-30% cheaper than domestic produce. This can be addressed by leveraging technology but PLI scheme doesn\u2019t have a technology component.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"7\" data-aria-level=\"1\"><b><span data-contrast=\"none\">Focus on new manufacturing units:<\/span><\/b><span data-contrast=\"none\"> This scheme <\/span><b><span data-contrast=\"none\">insists on new manufacturing units.<\/span><\/b><span data-contrast=\"none\"> Whereas the existing units are having the idle capacity as they are facing huge competition from cheaper imports from China. Incentives should be provided to revive these existing facilities.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"8\" data-aria-level=\"1\"><b><span data-contrast=\"none\">Focus on Big Companies:<\/span><\/b><span data-contrast=\"none\"> The policy <\/span><b><span data-contrast=\"none\">focuses on major players<\/span><\/b><span data-contrast=\"none\"> while three-fourths of API production is from MSMEs. The scheme is prone to carterlization and monopoly\u00a0of major players. More focus should be provided on the growth of MSMEs in the sector.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"9\" data-aria-level=\"1\"><b><span data-contrast=\"none\">Lacks supplementary measures:<\/span><\/b><span data-contrast=\"none\"> The PLI scheme remains a standalone measure. Growth of pharmaceutical industry would require supplementary measures from\u00a0Science and technology policy. Technology and innovation will form the backbone of indigenization.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"none\">For India to truly become Atmanirbhar and support the healthcare needs of 1.4 Bn people, along with the needs of the world, it needs to go beyond schemes and create a long-term strategy utilizing the expertise of public sector enterprises to ensure indigenization of pharmaceutical industry.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Introduction: Briefly provide overview of pharmaceutical industry in India. Body: Write about significance of indigenization of the pharmaceutical industry for the health care and economy of India. Write about the features,\u00a0issues and solutions associated with the PLI scheme. Conclusion: Briefly provide a way forward.\u00a0 India is known as pharmacy of the world. India is the&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/answered-describe-the-significance-of-indigenisation-of-the-pharmaceutical-industry-for-the-health-care-and-economy-of-india-how-far-production-linked-incentive-scheme-for-the-pharma-sector-has-bee\/\">Continue reading <span class=\"screen-reader-text\">[Answered] Describe the significance of indigenisation of the pharmaceutical industry for the health care and economy of India. How far production-linked incentive scheme for the Pharma sector has been able to forward this objective?<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-167311","page","type-page","status-publish","hentry","entry"],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/167311","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=167311"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/167311\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=167311"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}