Bulk Drug Parks

  • Background 
  • Drugs play a vital role in healthcare delivery in the country. Continuous supply of drugs is necessary to ensure delivery of affordable healthcare to the citizens. Any disruption in supply of drugs can have a significant adverse impact on drug security of the country. 
  • Indian pharmaceutical industry is the 3rd largest in the world by volume and 14th largest in terms of value. India contributes 3.5% of total drugs and medicines exported globally. However, despite these achievements, India is significantly dependent on import of some of the critical basic raw materials, viz., bulk drugs that are used to produce the finished dosage formulations. India imports bulk drugs largely for economic considerations. Bulk drugs accounted for 63% of the total pharmaceutical imports in the country during 20 18-19. 
  • Future growth of the pharmaceutical sector is contingent upon our ability to ensure uninterrupted supply of quality bulk drugs and our capacity to upscale their manufacturing during emergency situations. Self-reliance in manufacturing of bulk drugs is, therefore, highly desirable. 
  • With a view to significantly bring down the manufacturing cost of bulk drugs and thereby increase the competitiveness of the domestic bulk drug industry by providing easy access to standard testing & infrastructure facilities, a Scheme called “Promotion of Bulk Drug Parks” has been approved by the Government of India on 20th March 2020. 
  • Scope of the Scheme 
  1. This is a Central Sector Scheme. 
  2. Total financial outlay of the Scheme is Rs. 3000 Crore. 
  3. Three bulk drug parks will be supported under the Scheme. 
  4. Maximum grant-in-aid for one bulk drug park will be limited to Rs 1000 crore. 
  5. The duration of the Scheme is from FY 2020-202 1 to FY 2024-2025. 
  6. Under the scheme, a one-time grant-in-aid will be provided for creation of common infrastructure facilities in selected Bulk Drug Park proposed by a State Government. 
  7. The scheme will be implemented through a State Implementing Agency (SIA), a legal entity, set up by the concerned State Government. 
  • Objective 
  1. Increasing competitiveness, easy access to standard testing and infrastructure facilities and value addition in the domestic Bulk Drug Industry through creation of common world class facilities. 
  2. Strengthening the existing infrastructure facilities in order to make Indian Bulk Drug Industry a global leader in Bulk Drugs’ Exports. 
  3. Reducing the cost of production by 20-25% in the Bulk Drug Park leading to better availability and affordability of Bulk Drugs in the domestic market. 
  4. Exploiting the benefits arising due to optimization of resources and economies of scale.
  • Role of State Governments 
  • The State Government is envisaged to play a pro-active role in the following areas:- 
  1. Promoting the Bulk Drug Park aggressively at National & International level. 
  2. Undertaking equity stake in the SIA. 
  3. Providing the necessary assistance for external/ access infrastructure as land, access road, Power and Water supply etc. 
  4. Providing a flexible and conducive environment and considering special facilities like exemption of stamp duty etc. for the SIA/ individual Bulk Drug units to be set up in the Park. 
  5. Providing necessary project related clearances expeditiously.
  • What are bulk drugs or APIs?
  • A bulk drug, also called an active pharmaceutical ingredient (API), is the key ingredient of a drug or medicine, which lends it the desired therapeutic effect or produces the intended pharmacological activity. For example, paracetamol is a bulk drug, which acts against pain. It is mixed with binding agents or solvents to prepare the finished pharmaceutical product, i.e. a paracetamol tablet, capsule or syrup, which is consumed by the patient.
  • What are KSMs and DIs?
  • APIs are prepared from multiple reactions involving chemicals and solvents. The primary chemical or the basic raw material which undergoes reactions to form an API is called the key starting material, or KSM. Chemical compounds formed during the intermediate stages during these reactions are called drug intermediates or DIs.
  • Why is India promoting bulk drug parks?
  • India has one of the largest pharmaceutical industries in the world (third largest by volume) but this industry largely depends on other countries, particularly China, for importing APIs, DIs and KSMs.
  • This year, drug manufacturers in India suffered repeated setbacks due to disruption in imports. In January, factories in China shut down when the country went into a lockdown, and later, international supply chains were affected as the Covid pandemic gripped the entire world. The border conflict between India and China exacerbated the situation. All these factors pushed the Indian government to call for greater self-reliance across all industries, and in June, the department of pharmaceuticals announced a scheme for the promotion of three bulk drug parks in the country.
  • What will a bulk drug park look like, and what does the scheme offer?
  • A bulk drug park will have a designated contiguous area of land with common infrastructure facilities for the exclusive manufacture of APIs, DIs or KSMs, and also a common waste management system.
  • These parks are expected to bring down manufacturing costs of bulk drugs in the country and increase competitiveness in the domestic bulk drug industry. The Centre’s scheme will support three selected parks in the country by providing a one-time grant-in-aid for the creation of common infrastructure facilities. The grant-in-aid will be 70 per cent of the cost of the common facilities but in the case of Himachal Pradesh and other hill states, it will be 90 per cent. The Centre will provide a maximum of Rs 1,000 crore per park.
  • How will the Centre select the three parks?
  • Several states including Andhra Pradesh, Maharashtra, Gujarat, Haryana, Punjab, Tamil Nadu and Telangana have expressed interest in the scheme, and are likely to send their respective proposals. A state can only propose one site, which is not less than a thousand acres in area, or not less than 700 acres in the case of hill states. The proposals should contain the estimated cost, feasibility studies, environmental risk assessment etc. A project management agency, nominated by the department of pharmaceuticals, will examine these proposals and make recommendations to a scheme steering committee, which will then approve the proposals.