The production of Penicillin G and Clavulanic Acid began in October last year. Other APIs already in production include Atorvastatin, Sulfadiazine, Telmisartan, Olmesartan, Para Amino Phenol (raw material for paracetamol) and Oxcarbazepine.
The development is set to make India less reliant on China for imports of raw material used by the pharmaceutical industry.
These bulk drugs are largely used as antibiotics and to manage non-communicable diseases such as cardiovascular diseases, chronic respiratory diseases, and diabetes.
Bulk drugs accounted for 63% of the total pharmaceutical imports in the country during FY 2018-19.
As per commerce ministry data, in April-December of FY25, India’s exports of bulk drugs and intermediates totalled $3,520 million, while imports stood at $3,504 million, resulting in a slight trade surplus. In FY24, exports were recorded at $4,787 million, with imports at $4,556 million. In FY23, exports reached $4,709 million, while imports were $4,511 million.
Launched in 2020
The government in 2020 launched PLIs for promotion of domestic manufacturing of drugs. These were for Key Starting Materials (KSMs), Drug Intermediates (DIs) and APIs, with a financial outlay of Rs. 6,940 crore. The production tenure was from FY 2022-2023 to FY 2028-29.
According to the government, under the PLI scheme for bulk drugs, a total of 48 projects have been selected, of which 34 have been commissioned for 25 bulk drugs.
“Production of products such as Penicillin-G with 15,000 MT production capacity, Clavulanic Acid (1,000 MT), Atorvastatin (180 MT), Sulfadiazine (360 MT), Telmisartan (360 MT), Olmesartan (75 MT), Para Amino Phenol (13,500 MT) and Oxcarbazepine (195 MT) –have started,” said a department of pharmaceuticals spokesperson.
“Investment of approx. Rs.4,200 crore have been grounded so far. The sales made by the commissioned projects is worth Rs.1,500 crore which includes exports of over ₹400 crore,” said another official.
As per the department, the Penicillin G antibiotic project, established by Lyfius Pharma Pvt. Ltd in Kakinada, Andhra Pradesh with an investment of Rs.1,923.07 crore, is the largest fermentation-based facility in the country and is expected to lead to an import substitution of Rs.2,700 crore per annum.
Clavulanic Acid, a beta-lactamase inhibitor used with antibiotics, established in Nalagarh Himachal Pradesh with an investment of Rs.457.4 crore is expected to save Rs.600 crores per annum in imports.
“The investment under the PLI Scheme for Bulk Drugs has led to creation of cumulative annual production capacity of 55,000 metric tonnes. Actual production would depend on market conditions,” the spokesperson added.
Centrient Pharmaceuticals India Private Ltd has established its plant at Nawanshahr, Punjab for producing Atorvastatin with an investment of Rs.137.74 crore. Atorvastatin is a statin, used to lower cholesterol.
Andhra Organics Ltd has established its plant at Srikakulam, Andhra Pradesh for three products – Olmesartan (for high blood pressure) with an investment of Rs.30.50 crore, Sulfadiazine (antibiotic used to treat and prevent bacterial infections) with an investment of Rs.38.70 crore, and Telmisartan (high blood pressure) with an investment of Rs.40.00 crore respectively.
Leading NCD
The World Health Organization (WHO), in 2022, estimated that about 200 million adults suffer from hypertension in India. It is estimated that hypertension is the leading non-communicable disease (NCD) risk factor, attributable to nearly 10% of all deaths. An ICMR study published in 2023 found the prevalence of diabetes is about 100 million among Indians.
Industry experts believe that among these bulk drugs, three are very important — Para Amino Phenol, a raw material for manufacturing Paracetamol, Penicillin G and Clavulanic Acid—used for antibiotics like amoxicillin and Augmentin.
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Viranchi Shah, President, Indian Drugs Manufacturers Association (IDMA) said, ‘Para Amino Phenol is a precursor or raw material to the paracetamol. When covid struck us, paracetamol was essential to every patient in this country. That time, India had only one plant which was making PAP, and all other PAP was imported.
The paracetamol tablet may cost just ₹5, but having at the time when the patient is not well is more than ₹5. Now, with the addition of domestic manufacturing of PAP, we have strengthened the manufacturing of paracetamol—which is a very basic drug and no longer dependent on imported PAP as it is indigenously available. It is going to help in times of crisis when there is disruption in supply chain.”
Precursor to antibiotics
Penicillin G is precursor to many antibiotics such as amoxicillin etc. “Around 20-30 years back, we used to manufacture Pen-G, but slowly capabilities got developed in neighborhood and we lost this industry. They actually took over the entire supply chain which led to the closure of the Indian plants or converted into something else, and we became dependent on import on Pen-G to manufacture critical antibiotics. Now, it has come to India. Similarly, the Cluvalanic Acid is again an important API largely used for Augmentin among other drugs. It is used to prevent many infectious diseases. We have always been dependent import of Cluvalanic Acid. Now it has come back to India and our capacity has enhanced very significantly. It is a big success for PLI scheme for bulk drugs and bringing self-sufficiency in critical APIs.”
Shah said that the problem was earlier that India was not competitive. “The cost which India could produce earlier was not competitive because of certain reasons and PLI bulk drug industry slowly migrated out of India. With the PLI Bulk scheme, there is an incentive which government is giving to the manufacturers, which makes it little more competitive.”
He said that in the five 5-7 years, it is believed that bulk drug industry will get a significant size and scale and once India achieve this, India will automatically become self sufficient and able to sustain the bulk drug industry at a competitive price.
“In pharma, we have to get Drug Master Files (DMFs) registered, submit stability and technical data to various markets across the world. So, these regulatory approvals takes time. When more Indian companies get regulatory approvals worldwide, we are sure that our exports will take great momentum,” said Shah.
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