Aragen Lifesciences to help Indian bioeconomy to reach $300 billion by 2030?

India’s pharmaceutical Industry has long been dependent on Chinese-made Active Pharmaceutical Ingredients [API’s] and has imported finished pharmaceutical and medical device products from China for many years. Nearly 70 percent of all APIs and related Drug Intermediates (DIs) and Key Starting Materials (KSMs) are imported from China. China is the global leader in export of APIs, exporting over 2000 API molecules through 7000 API manufacturers, and caters to around 20 percent of world’s API demand.

Among the on-going cross-border tensions between the two countries, any export halt from China can make Indian pharmaceutical industry vulnerable to supply chain disruptions and can thwart drug security. As such import dependence on China is not in favour of India’s national interest, hence there is a need to diversify its sourcing and build a robust ecosystem for India’s bulk drug manufacturing. Ensuring cost-effective production through shared facilities and economies of scale is equally important. India can partner with countries other than China like the United States, Italy, South Korea, Singapore and Belgium to import the API’s, however, the focus should still remain on boosting self-sufficiency in manufacturing to avoid drug shortage in any other future health crisis.

In this regard, the Indian government took initiative in 2020 and launched Production-linked incentive (PLI) scheme for promotion of domestic manufacturing of critical Key Starting Materials (KSMs)/ DIs and APIs in India. Under this scheme, a financial incentive is given to eligible manufacturers of identified 41 eligible products which covers 53 APIs for 6 years. Production Linked Incentives of upto INR 6,940 crores have been approved. Tenure of the PLI Scheme is FY 2020-21 to FY 2029-30. The four target segments into which the eligible KSMs/DIs/APIs products have been divided based on their criticality and import dependence namely:

• Key Fermentation based KSMs/DIs
• Niche fermentation based KSMs/DIs/APIs
• Key Chemical Synthesis based KSMs/DIs
• Other Chemical Synthesis based KSMs/DIs/APIs.

The complete list of applicants approved under PLI scheme for promotion of domestic manufacturing of critical KSMs/Dis/APIs in India until Q1 2023 can be accessed here. Companies like Macleods Pharmaceutical Limited, Alta Laboratories Limited, and Hindys Lab Private Limited have benefitted from this scheme. Also, the approval of three bulk drug parks located in Gujarat, Himachal Pradesh, and Andhra Pradesh is a significant step towards bringing down the manufacturing cost of raw materials and promoting competitiveness of the domestic bulk drug industry.

Another Production Linked Incentive Scheme (PLI) for Pharmaceuticals was initiated in March 2021 to boost India’s manufacturing capabilities by increasing investment and production in the pharmaceutical sector and contributing to product diversification to high value goods such as biopharmaceuticals, complex generic drugs, patented drugs or drugs nearing patent expiry, cell based or gene therapy drugs.

With companies like Aragen planning to commission a new biologics manufacturing facility in Bangalore which is designed to include plasmid DNA, mRNA, cell and gene therapy, microbial manufacturing and additional GMP manufacturing suites, and Cytiva bringing an experience center to Pune to offer learning and development programs needed to accelerate the development of novel therapeutics, India comes closer to realizing its dream of Indian bioeconomy reaching $300 billion by 2030 and delivering on its Aatmanirbhar Bharat vision and mission.