Pharma sector seeks boost to research, innovation

The sector has high expectations from the upcoming Budget in terms of clear signals aimed at driving research and manufacturing

Indian Pharmaceutical Alliance (IPA) president and Dr Reddy's Laboratories chairman  K Satish Reddy on Wednesday asked the Centre to put in place a robust framework for  encouraging research and innovation in pharmaceuticals and other sectors in the country.

The framework should facilitate industry-university collaborations, incubation,  grants and loans to encourage more private sector participation in innovation besides simpler procedures to utilise these provisions, according to him. “We expect to see clear signals from the Budget as to how the government is going to encourage private research,” he said while stating private participation in research and innovation was just a fraction of the actual potential that existed in the country.

Reddy said the industry in general and the pharmaceutical sector in particular had high expectations from the upcoming Budget in terms of clear signals aimed at driving research and manufacturing towards achieving self-sufficiency.

Among specific measures, the tax incentive of weighted deduction in R&D spend available to the companies had to be increased to 250 per cent from the present 200 per cent while the cumbersome procedures that made the  Innovation Fund mostly unutilised by the industry would have to go, according to him.

He said the government  should create special industrial clusters for active pharmaceutical ingredients (APIs) manufacturing with a plug-and-play environment as the country had become 100 per cent dependent on Chinese imports even in the case of certain essential drugs.

“India cannot produce Pencilin-based drugs in the event of a supply chain disruption as we are 100 per cent dependent on China for the APIs that go into these products. We lost out to China on the API front only because of the lack of cost competitiveness here,” Reddy said.

The IPA wanted the government to take specific steps to incentivise pharmaceutical exports from the country. He asked the Centre to revisit certain previous actions such as reversal of incentives announced in the original SEZ policy. “After removing tax incentives no new SEZ  had come up in the country. When you have set export targets you need to revive the old incentives to help boost pharma exports,” Reddy said.