The Indian government has taken a significant step to bolster innovation in the pharmaceutical sector by extending the application deadline for its ambitious ₹5,000-crore research and development scheme. The new deadline for the Promotion of Research and Innovation in Pharma & MedTech (PRIP) Scheme is now 10 November, providing potential applicants with additional time to submit their proposals.
Bridging the Innovation Gap in Indian Pharma
While India has rightfully earned the title "pharmacy of the world" for its massive production of affordable generic medicines, the country has traditionally lagged in pioneering basic research. This includes the discovery of new chemical entities and the development of complex novel drugs that command premium value in global markets.
The PRIP scheme represents a strategic shift from this volume-based model to a value-based, innovation-driven approach. The government's vision is clear: to position India as the "laboratory of the world" rather than just its manufacturing hub.
Currently, the Indian pharmaceutical industry accounts for approximately 3.4% of the global pharma market. With the right enablers, this share could expand significantly to 4% (around $130 billion) or even 5% (roughly $160 billion), creating substantial economic value.
How the Scheme Addresses R&D Challenges
The investment gap in research and development between Indian and Western pharmaceutical companies is substantial. Leading global firms typically allocate 15% to over 20% of their revenues to R&D for breakthrough therapies like gene therapy and precision medicine. In stark contrast, top Indian companies invested only about 7.2% of their sales in research during 2020-21.
The PRIP scheme tackles this disparity through two major components designed to create a comprehensive research ecosystem.
Establishing Centers of Excellence: A substantial ₹700 crore has been allocated to build world-class, shared research infrastructure across the seven branches of the National Institute of Pharmaceutical Education and Research (NIPER). This initiative aims to foster stronger industry-academia collaboration, cultivate quality research culture, and develop a sustainable pool of scientific talent.
Direct Financial Grants to Industry: The larger portion of ₹4,200 crore is designated for direct grants to industry players and startups. This funding mechanism is specifically designed to de-risk projects in strategic areas, encouraging private sector investment in developing globally competitive intellectual property.
Funding Structure and Priority Areas
The scheme employs a flexible, risk-adjusted funding approach that caters to different types of innovators. For startups and MSMEs working on early-stage projects, the scheme provides up to ₹5 crore per project. Significantly, for projects costing up to ₹1 crore, no co-funding from the applicant is required, providing crucial risk capital for innovation.
For larger industry players and startups undertaking more mature, late-stage projects, the scheme offers grants of up to ₹100 crore, typically covering a maximum of 35% of the total project cost. This co-funding model ensures both government and industry stakeholders remain committed to project success.
The scheme focuses its substantial grant component on six priority areas including new medicines like new chemical entities and biologics, complex generics and biosimilars, and novel medical devices.
Notably, the program offers enhanced financial assistance—up to 50% of project cost—for Strategic Priority Innovations (SPIs) that address the country's public health concerns where market potential might be limited. These SPIs include orphan drugs for rare diseases and medications targeting antimicrobial-resistant priority pathogens.
The extension until November 10 was granted primarily to facilitate wider participation and accommodate additional requests from interested parties. Despite already receiving an encouraging response from various stakeholders including startups, MSMEs, large industry players, and multinational companies, the government aims to ensure maximum inclusion.
Applicants were advised that key preliminary steps such as entity locker registration and fee payment on Bharatkosh require processing and verification time, necessitating the extension to give all registered entities adequate opportunity to complete their formal applications.
