Scheme for Promotion of Research and Innovation in Pharma MedTech Sector (PRIP)

EXTRAORDINARY PART I—Section 1 PUBLISHED BY AUTHORITY No. 199] NEW DELHI, THURS DAY, AUGUST 17, 2023/SHRAVANA 26, 194 5 CG-DL-E-17082023-248170 1 5 से 6 30 2 6 से 7 30 3 7 से 9 40 2023 -24 140 10 150 2024 -25 1202 10 1212 2025 -26 1203 12 1215 2026 -27 1203 10 1213 2027 -28* 1202 8 1210 क ु ल ₹4950 ₹50 ₹5000 MINISTRY OF CHEMICALS AND FERTILIZERS (Departmen t of Pharmaceuticals ) NOTIFICATION New Delhi, the 16th August, 2023 No. 50018/2/2022 -NIPER .—Scheme for Promotion of Research and Innovation in Pharma MedTech Sector (PRIP). 1. Introduction 1.1 Pharmaceutical sector requires continued research to r emain competitive. However, to leapfrog substantive measures are needed to venture into new areas to garner more value to the product and achieve increased exports. Expansion of the industry’s presence in the innovation accounts for 2/3rd of the global pha rmaceuticals opportunities. 1.2 Currently the Indian pharma constitutes 3.4% market share of the global pharma industry. If the Industry adopts a business -as-usual approach, the market value would grow to around 108 billion USD by 2030 with 11% CAGR. Th e global pharma market positioned at 1230 bn USD in 2020, is expected to grow to 3206 bn USD by 2030 at a Compound Annual Growth Rate of 8.5%. It is envisioned that a focus on growth enablers can help India grab a 4% market share reaching 130 bn USD mar ket size and a 5% market share will position India at 160 bn USD. (Global Pharmaceutical Market opportunities and strategies report, 21 Oct 2020). 1.3 Indian pharma industry has largely remained confined to generic drugs where they are holding global le adership. The total amount spent on pharma R&D in terms of USD bn in US is 50 -60, China is 15 -20 and in India it is ~3. In the financial year 2021, the investments in R&D by the top ten Indian Pharma Companies amounted around 7.2% of their sales. There is a need to increase the R&D expenditure in the country by further promoting the research and innovation. There is urgent need to shift the focus to new areas where future trajectory of pharma industry lies. Accordingly, six moon -shot (priority) areas have b een identified which hold potential for the future and will help industry to leapfrog in these areas. 1.4 At present a major component of Indian exports are low value generic drugs while a large - proportion of the demand for patented drugs is met throug h imports. This is because the Indian Pharmaceutical sector lacks in high value production along with world class pharma R&D. In order to encourage the global and domestic players to enhance investment and production in these product categories, a well -designed and suitably targeted intervention is required to promote specific high value goods such as bio - pharmaceuticals, complex generic drugs, patented drugs or drugs nearing patent expiry, cell based or gene therapy drugs. 1.5 The medical device secto r is also an essential and integral constituent of the healthcare sector. The medical devices constitute a multi -disciplinary sector, with the following broad classification: (a) Electronic equipment; (b) Implants; (c) Consumables and Disposables; (d) Surg ical instruments and (e) In -vitro Diagnostic Reagents. 1.6 The market size of the medical devices in India is estimated to be 11Billion USD (approximately ₹ 90,000 Cr) in the year 2020 and its share in the global medical device market is estimated to b e 1.5%. the sector in India is at a growth stage with CAGR of 10 - 12% over the last decade. The growth of medical device sector in India is primarily driven by growing and ageing population, increased per capita and disposable income, demand for healthcare infrastructure, rise in preventive testing and spread of healthcare services and insurance programs. Recently, the contribution of India’s medical devices sector has become even more prominent as it supported the domestic and global battle against COVID -19 pandemic by the production of medical devices & diagnostic kits, such as Ventilators, IR Thermometers, PPE Kits & N -95 masks, Rapid Antigen Test Kits and RT -PCR kits. The current pandemic has also created a demand for innovative products focusing on digi tal devices, miniaturization, wearables, etc., which offer opportunity to leverage Indian IT skills and digital ecosystem to capture higher value in the global market. 1.7 70% of human pathogens in last three decades globally have animal origin. Animal disease outbreak leads not only to mortality and morbidity but also directly and indirectly impact economy through loss of productivity. It is estimated that India has lost upwards of USD 40 -45 Bn due annual disease outbreak. Most of the drugs developed a re similar for human and animal health albeit with different dosage forms. Animal health care is a rising sector. The Indian Animal health care market has reached INR 73.4 Bn in 2022 and expected to reach INR 120.3Bn by 2028, exhibiting a CGAR of 8.49% duri ng 2023 -28 (iMARC - Animal Health market forecast 2023 -28). This scheme which promotes R&D in pharmaceutical sector will also benefit animal health care market thus aligning with the vision of “ONE HEALTH”. 1.8 Further, R&D in the proposed areas will h elp in new drug discovery and new treatment solutions that will reduce global burden of diseases impacting developing and developed countries. 2. Objectives The objective of the scheme is to transform Indian Pharma MedTech sector from cost based to innovation -based growth by strengthening the research infrastructure in the country. The aim of the scheme is to promote industry - academia linkage for R&D in priority areas and to inculcate the culture of quality research and nurture our pool of scientists . This will lead to sustained global competitive advantage and contribute to quality employment generation in the country. 3. Salient features of the Scheme: The scheme is proposed to have two components as follows - 3.1 Component A : Strengthen ing the research Infrastructure – Setting up of Centres of Excellence at National Institute of Pharmaceutical Education & Research (NIPERs): Department has set up seven National Institutes of Pharmaceutical Education & Research (NIPERs) as institutes of national importance for imparting postgraduate and doctorate education and conduct high end research in various specializations in pharmaceutics. NIPERs have increasingly started giving higher importance to research, which is evident from deciding on a ‘Comm on Research Programme’ (CRP), launch of NIPER Research Portal and enhanced importance to industry academia linkage. Subsequently, on amendment of NIPER Act in December 2021, a provision ‘to establish Centres of Excellence for drug discovery and development and medical devices’ has been specifically included as one of the functions of these Institutes. Recently, in the Budget speech 2023 -24, it has specifically been announced that ‘Para 30: A new Programme to promote research and innovation in pharmaceutical s will be taken up through centres of excellence. We shall also encourage industry to invest in research and development in specific priority areas .’ It is, therefore, proposed to establish CoEs in the seven existing NIPERs at Mohali, Ahmedabad, Hyderabad, Guwahati, Kolkata, Hajipur and Raebareli at a tentative cost of ₹ 700 cr over a period of five years in following specializations: i. NIPER Mohali - Anti-Viral and Anti - Bacterial Drug Discovery and Development ii. NIPER Ahmedabad - Medical Devices iii. NIPER Hyderabad - Bulk Drugs iv. NIPER Kolkata - Flow Chemistry and Continuous Manufacturing v. NIPER Raebareli - Novel Drug Delivery System vi. NIPER Guwahati - Phyto -pharmaceuticals vii. NIPER Hajipur - Biological Therapeutics This will help in building specific research capacities in the identified priority areas in a focused time bound programme, tapping industry -academia linkage. The CoEs will strengthen the research infrastructure in Pharma -MedTech sectors in the country by providing advanced facilities to conduct research and will als o help in nurturing talent pool by promoting industry academia linkage. 3.2 Component B: Promotion of Research in Pharma MedTech sector : The budget 2023 -24 proposes to encourage industry to invest in research and development in specific priority areas . Accordingly, it is proposed that financial assistance under the component would be provided to promote R&D in six priority areas. This component is further divided into following three categories: Category – B I – Nine established pharma companies may be selected under this category who are willing to carry out research in six priority areas with academic collaboration in Govt. institute of national repute. The companies would avail the facilities of the research infrastructure (lab, equipment, support st aff) available at national institutes in addition the company must provide training to selected number of students/scientists of the institutes. Investments made by the companies on the projects at the institutes would be supported with financial support a t the rate of 35% of the total cost incurred or 125 Cr whichever is less on milestone basis (from TRL 1 to reach TRL 9) over a period of 5 years under benefit sharing principle. Category B II – In order to expedite the market launching and large -scale comm ercialization process of products/ technologies in priority areas having high commercial potential or societal impact by providing financial assistance. Funding would be provided to Thirty research projects in six priority areas which are at successfully v alidated level (TRL 5) to reach TRL 9 @ 35% of the cost or ₹ 100 Cr whichever is less over a period of 5 years on the principle of benefit sharing. The projects would be selected on the basis of TR level (5), commercial potential, national /social impact o f the product, affordability, revenue model and past performance of the company. The funding will be released on installment basis upon reaching the desired milestone as follows: S. No TRL Level Percentage (%) of funding 1 5 to 6 30 2 6 to 7 30 3 7 to 9 40 4. Benefit sharing for Category B I & II The funding disbursed for the projects will be recovered through benefit sharing (excluding refunded funding, if any) either through royalty or equity in following ways: i. 10% royalty on net sale of the product/technology till the patent is effective; or ii. Equity (not less than 100% of the DoP support provided) Beneficiaries will have to opt either of the above at the time of signing the agreement. DoP may seek payment by way of one -time transaction in th e occurrence of events as under: a. The fund recipient entity successfully commercializes the product/technology supported through DoP -PRIP scheme. b. Licensing/Assignment/ Technology -transfer of the Project developments to any third party where the Fund Recipie nt is not under taking direct market reach which also be treated as successful Commercialization and the Fund Recipient shall be liable for Benefit Sharing with DoP. c. If the Fund Recipient intent to transfer or sell/assign the interest of Project developmen ts it shall take prior written permission from DoP before doing so. DoP reserves the right to realize the benefit sharing, in case of one-time transaction as will be mutually agreed while granting such permission. d. If the Fund Recipient licenses the interes t of Project developments for periodical payments including Royalty, then the fund recipient can also continue to share the benefits as prescribed by DoP to be met from the periodical proceeds received from licensees/sub -licensees. e. In cases of significant changes such as public offering of shares, raising of venture funds, change in the share holding pattern, change in the legal entity status, changes due to substantial expansion, merger and acquisition etc., DoP reserves the right to enforce the benefit sh aring obligation or the Surety Bond and recover the remaining benefit sharing committed for the project through the resolution or liquidation process as a receivable in favour of DoP. Payment of royalty shall fall due beginning with the first sale of produ ct(s) and the liability to pay royalty will terminate upon the first of any of the following two events to occur – a. 10% royalty has been paid till the patent is effective or in the form of equity; or b. In case of Foreclosure or Termination of the Project In case, the project is declared unsuccessful/commercially unviable, the remaining assistance would not be released and any un -utilized amount as on date would be refunded to Department of Expenditure within 30 days of the declaration. Category – B III – Fundi ng would be provided to research projects in six priority areas to help Indian startups and MSMEs to reach TRL 4. Under this category, DoP will provide financial supports for project in six priority areas which have clear potential to translate into commer cial product/technology. Around 125 research projects from start - ups/ SMEs/ MSMEs having potential or having made sufficient headway in the research of priority areas will be selected and funding up to ₹ 1 Cr /projects over a period of five years in miles tone manner which would be provided from ideation to proof of concept on royalty sharing basis. Indicative criteria for selection of beneficiaries under this category are as follows:  SMEs, MSMEs and Start -up should be registered with DPIIT.  Start -ups with industry -academia collaboration will be given certain preference  Availability of research talent and of research infrastructure  Unmet need being solved, disease being targeted  Possibility of generating IP, Clear potential for becoming commercially viable p roduct  Beneficiaries required to pay 5% royalty on net sales of the product/technology developed through DoP support till the time such royalty payment becomes equivalent to the assistance disbursed by DoP for the Project.  DoP would also seek payment in ca se there is transfer of intermittent technology, know - how, application to third party to further carry out commercialization with/ without further development by way of one -time transaction.  Payment of royalty shall fall due beginning with the first sale of the product(s) and the liability to pay royalty will terminate upon the first of any of the following two events to occur – a) 5% royalty has been paid till the royalty amount paid becomes equal to the amount of the assistance disbursed and that was n ot returned as unutilized funds; or b) In case of Foreclosure or Termination of Project. 5. Priority areas: The scheme shall cover pharmaceutical research under six (06) priority areas as mentioned below - I. Area/ Product 1 a. New Chemical En tity (NCE) b. New Biological Entity (NBE) c. Phyto -pharmaceuticals (natural product) II. Area/ Product 2 - i. Complex generics: Products with a. A complex active ingredient(s) (e.g., peptides, polymeric compounds, complex mixtures of APIs, naturally sourced ing redients). b. A complex formulation (e.g., liposomes, colloids). c. A complex formulation technology and manufacturing processes permeation enhancers, continuous flow manufacturing. d. A novel route of delivery (e.g., locally acting drugs such as dermatological pro ducts and complex ophthalmological products and optic dosage forms that are formulated as suspensions, emulsions or gels). e. A complex/novel dosage form (e.g. modified release formulations, transdermal, metered dose inhalers, extended release injectable). f. Innovative drug -device combination products (e.g. medicated catheters, auto injectors, metered dose inhalers. ii. Biosimilars III. Area/ Product 3 - Precision medicine (Targeted innovative therapeutics): i. Any approach that uses information about a person's o wn genes or proteins to prevent, diagnose, or treat a disease. ii. Stem cell therapy, gene therapy. iii. Biomarkers IV. Area/ Product 4 – Medical devices: i. AI/ML based medical devices with software development, Software as Medical Device (SaMD) and software in Me dical Device (SiMD). ii. Medical diagnostics and screening devices with genetic technology. iii. Robotic medical devices for surgical procedures. iv. Medical devices with telemedicine facilities V. Area/Product 5 - Orphan Drugs: Medicinal products intended for diagnosis, prevention or treatment of life threatening or very serious diseases or disorders that are rare - about 450 rare diseases recorded in India (in tertiary care hospitals) VI. Area/ Product 6 - Drug development for AMR Prioritisation will b e done within and among the categories based on future potential, opportunities and national importance. 6. Financial Cost: The scheme would have a financial outlay of ₹ 5,000 cr, over a period of 5 years from financial year 2023 -24 to 2027 -28, as per details as under: (₹ in Cr) I. Component A 700 II. Component B Categories Description Category – B I Category – B II Category – B III ₹ crores No. of projects to be selected 9 30 125 Funding @35% or ₹ 125 Cr whichever is minimum/part icipant over a period of 5 years @35% or ₹ 100 Cr whichever is minimum / participant over a period of 5 years 1 Cr over a period of 5 years on milestone basis Eligible R&D fund over 5 years ₹ 1125 ₹ 3000 ₹ 125 Total fund per yea r ₹ 850 Total funding for 5 years ₹ 4250 Total outlay for I & II ₹ 4950 Administrative cost ₹ 50 Total outlay of the scheme ₹ 5000 The incentives proposed for the above -mentioned categories, if left unused, can be redistributed as per the nee d within the categories with the approval of competent authority. Proposed Annual Budget outlay for the scheme (₹ in Cr) Financial Year Funding Outgo Administrative cost Total budget outlay 2023 -24 140 10 150 2024 -25 1202 10 1212 2025 -26 1203 12 1215 2026 -27 1203 10 1213 2027 -28* 1202 8 1210 Total ₹ 4950 ₹ 50 ₹ 5000 * Payment will become due in the following year 7. Monitoring and Evaluation: Empowered Committee: An Empowered Committee (EC) under the chairmanship of CEO NITI Aayog is proposed to be set up with Secretary DoP, Secretary DoH&FW, Secretary DHR, Secretary AYUSH, Secretary DST, Secretary DSIR, Secretary DBT,Scientific Secretary,O/o PSA and AS&FA DoP as members for administering the scheme. The deliverables of Centres of Excellence (C oEs) being set up at NIPERs will be fixed by the department in consultation with Board of Governors (BoGs) of the respective institutes. The CoEs will be reviewed based on set deliverables. The EC will conduct periodic review of the scheme. It will also b e authorised to carry out any amendments in the scheme and the guideline thereof. Further, the EC may revise incentive rates and ceiling, if required, within total financial outlay of the scheme. Detailed constitution, functioning and responsibilities of the EC will be elaborated in the Scheme Guidelines. Project Appraisal and Approval Committee: A committee under the chairpersonship of Secretary, Pharmaceuticals will be set up with representatives (not below the level of Joint Secretary) from DST, DSIR, D BT, DGHS, DHR, AYUSH and CDSCO which will examine and approve the projects, consider and approve claims for disbursements and take appropriate steps to contain the expenditure within the prescribed outlay. Technical Committee: A technical committee of 5 -7 members will be set up with representatives from scientific departments, CDSCO, experts from industry and academia. The committee will examine issues referred to it by project appraisal and approval committee and provide inputs on technical issues on vario us issues under the scheme. Project Management Agency (PMA): The scheme shall be implemented through a project management agency that will be responsible for providing secretarial, management and implementation support and to carry out other responsibiliti es as assigned by DoP within the framework of scheme and guidelines thereof. PMA would be responsible for receipt of the applications, appraisal of the applications, and verification of eligibility threshold criteria, examination of claims for disbursement of incentives. Compilation of the data regarding progress and performance of the scheme including cumulative investment in research and investment in priority areas of research in Pharma MedTech done by selected applicants. Detailed responsibilities of P MA will be elaborated in scheme guidelines. 8. Approval and Disbursement of financial assistance/funding a. Application under the Scheme can be made by any company registered in India. b. An application, complete in all aspects, will have to be submitted be fore the due date. Acknowledgement will be issued after initial scrutiny of the application. c. The eligible applicants will be appraised on an ongoing basis and considered for approval, based on predefined selection criteria. d. The funding shall be released to the selected participants under the scheme who meet the required threshold criteria. e. Timely disbursals of incentives by the project Management Agency will be monitored by DoP and reviewed by the Empowered Committee subject to budgetary allocations by the Dept. of Expenditure. f. The incentive will be paid on investment in research as defined in scheme guidelines in respect of maximum period of 5 years for component B. g. The progress in approval of applications and disbursal of incentive shall be monitored on an ongoing basis against the monitoring framework to be specified in the guidelines. 9. Impact of the Scheme a. Focus on certain priority areas which will help India’s pharma industry leapfrog and radically strengthen its position in the world market as innovation accounts for 2/3rd of global pharmaceutical opportunities b. Development of Research Infrastructure - The scheme would help in building world class research atmosphere at NIPERs by establishing CoE and making a talent pool of qualified trained students. c. The s cheme would help in launching of commercially viable products thereby accelerating the growth of Indian Pharmaceuticals sector. RAJNEESH TINGAL , Jt. Secy . Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayap uri, New Delhi -110064 and Published by the Controller of Publications, Delhi -110054.