India’s Bulk Drugs Incentive Scheme Finds Takers In Mankind, Aarti
FDI Potential Of Bulk Drugs Parks Hazy
As India revealed finer details of two schemes to promote bulk drug production, Mankind Pharma and Aarti Drugs spelled out a preference for chemical synthesis products - they are likely to be joined by more companies reluctant to invest in some that are fermentation-based. Whether a “plug and play” format for bulk drug parks will attract foreign investment remains to be seen.
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As the largest manufacturer of active pharmaceutical ingredients globally, China is bracing for more uncertainty amid the global pandemic and fast-changing environment, particularly in the US.
Companies including Dr Reddy’s will consider investing in new API units if the Indian government tweaks its incentive scheme to permit exports of surplus production. Other suggested changes to the $1.3bn stimulus, aimed at enhancing the country's medicines security, include extending incentives to brownfield expansions and removing restrictions on a change in product mix.
A recent military skirmish with China and a 35-40% average increase in prices of drug raw materials has seen India step up scrutiny of imports from the country. While the industry is seeking a hike in domestic formulations prices, product shortages are not expected in the short term.