DOP amends PTUAS, expands eligibility criteria to include MSMEs

The Department of Pharmaceuticals (DoP) has announced a comprehensive overhaul of the Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS) sub-scheme. PTUAS is a credit linked scheme which provides financial support of up to one crore to a pharma MSME aspiring to upgrade its manufacturing facility as per WHO-GMP standards or Schedule M standards. It is among the three sub-schemes of ‘Strengthening Pharmaceuticals Industry’ (SPI) to strengthen pharma MSMEs in the country. The other two sub-schemes are Assistance to Pharmaceutical Industry for Common Facilities (APICF) in clusters and Pharmaceutical & Medical Devices Promotion and Development Scheme.

The revamped scheme introduces substantial changes, including reimbursement subsidies ranging from 10-20 per cent for Micro, Small, and Medium Enterprises (MSME) manufacturers. They aim to facilitate upgradation of quality standards, compliance with revised Schedule M and obtaining World Health Organisation’s (WHO) Good Manufacturing Practice (GMP) certifications.

The approval of the revised scheme follows a thorough review by the Scheme Steering Committee, aligning with the updated Schedule-M of the Drugs and Cosmetics Rule, 1945, issued by the Department of Health & Family Welfare on December 28, 2023. Notably, the revised guidelines eliminate the penalty clause and the requirement of a bank guarantee that were present in the previous guidelines.

The Department emphasises that the revamped PTUAS Scheme broadens the eligibility criteria, offers flexible financing options, and focuses on subsidies on a reimbursement basis, deviating from the traditional credit-linked approach. The scheme aims to encourage widespread adoption, providing comprehensive support for compliance with new standards. Additionally, it introduces a dynamic incentive structure and integration with state government schemes, allowing units to benefit from additional top-up assistance. The Project Management Agency (PMA) has been enhanced to strengthen the verification mechanism.

A statement from the Department of Pharmaceuticals informed, “The Department of Pharmaceuticals is confident that reform in the PTUAS Scheme will contribute to the pharma industry’s growth and compliance with global manufacturing standards. The revamped Scheme underscores the government’s commitment to supporting the pharma industry which is critical to the nation’s health and well-being.”

The revised scheme is expected to support 300 units, with a total outlay of Rs. 300 crore, over the next two fiscal years (150 units each in 2024-25 and 2025-26). This marks a departure from the initial plan of supporting 420 new projects with the same financial outlay. The revised objective clause now specifies that the scheme supports the upgradation of pharma production facilities, enabling them to obtain revised Schedule M and WHO-GMP certifications by providing subsidies on a reimbursement basis.

The intended beneficiaries are now specified as existing pharmaceutical manufacturing units with an average turnover of less than Rs. 500 crore over the last three years. The revamped incentive structure outlines that eligible pharma units can receive a maximum of Rs. 1 crore, with varying percentages of investment under eligible activities based on turnover brackets.

The revised guidelines remove previous restrictions on subsidy usage, allowing for a broader range of eligible expenditures, including utilities, clean room facilities, testing labs, and consultation/certification expenses. To apply for the scheme, pharma units must submit an online application with a detailed gap analysis of the existing manufacturing unit.

The Department of Pharmaceuticals has also addressed concerns raised by industry demands, including meeting certification expenses. The penalty clause, which previously led to the conversion of the loan into a normal loan if technological upgradation was not achieved within 18 months, has been removed. 

The move has evinced mixed reviews from the industry.

Some experts have expressed hope that SME pharma companies will take maximum advantage of this revision. The MSME industry has also lauded this move. Jagdip Singh and Labnish Jindal, Directors, Pundrug Research Foundation, a pharma cluster created by 10 Punjab-based pharma manufacturers with common testing facilities,  commented, “Subsidising upgradation is a welcome step because it was impossible for 90 per cent Micro and Small units to upgrade on their own. Large industry outright refused to supply to Jan Aushadhi. If small industry closes down Jan Aushadhi ceases to exist. We appeal to the Government to ensure NIPER imparts training for documentation because machines alone cannot cause compliance of Schedule M. Sadly NIPER is busy in exporting post graduates to the West at Taxpayer cost. Support to Micro/Small industry is zero for the last two years.”

They added, “Most B Pharm colleges are producing below average manpower for production and testing for which representations were sent to Govt records repeatedly. Documentation is an altogether different skill without which compliance is not possible. Industry is supported by such institutions all over the world. If we need to be world class we cannot lag on this front.”