Government Plans Rs 2,000 Cr Pharma VC Fund

Government is planning to set up a Rs.2,000 Cr venture capital fund to promote drug discovery and strengthen pharma sector infrastructure in India.

Initial corpus would be about Rs.500 Cr and it would grow over a period of time.

The Government is in the process of appointing a consultant for preparation of a Detailed Project Report (DPR) in this regard.

The Department of Pharmaceuticals (DoP) will also set up 740 Janaushadhi outlets (low-cost medicine stores) in India over next two years. There are 79 Janaushadhi outlets at present. The government will invest Rs.90-95 Cr for these stores, which will sell non-branded generic drugs.

The initial investment would be made by the central government, while space and operational expenses would be handled by respective states.

Government is also planning to set up pharma parks in association with State Governments.

More definitive measures on the price control that Government exercises on medicines are expected to emerge with the revised National List of Essential Medicines (NLEM) expected this month.

Price control was earlier based on the market share of medicines, but in the revised regime, “essentiality” will be the criteria.

At present, the NLEM comprises 354 medicines, of which 74 are under price control.

Under the Union Health Ministry, the erstwhile List of Essential Drugs was rechristened NLEM and its last major revision was in 2003. Essentiality would define medicines that are “life-saving”, “critical” and beyond.

India accounts for nearly 6% of the global generic drug market worth $124 billion and is ranked third, behind the US and China.

The Indian drug companies are developing over 60 new molecules and will require about $1 billion and work of about 10-15 years to commercialise a new drug. Banks and other financial institutions are reluctant to fund new drug research initiatives, considering the risk involved and the need for long-term investment.

Transaction Reference: BS

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