TAG: GS 3: SCIENCE AND TECHNOLOGY
THE CONTEXT: After a hiatus of three decades, India is set to resume the manufacturing of Penicillin G, a crucial antibiotic ingredient.
EXPLANATION:
- This significant development is attributed to the government’s Production Linked Incentive (PLI) scheme, launched during the pandemic to boost domestic manufacturing.
- The decision comes with its share of historical challenges and the evolving landscape of pharmaceutical production in India.
Why Did Penicillin Manufacturing Halt in the 90s?
- Penicillin G, just like many other active pharmaceutical ingredients (APIs) that India manufactured, was phased out of production because of subsidy-driven cheaper Chinese products flooding the market.
- The last plant to stop production of the antibiotic was of Torrent Pharma in Ahmedabad.
- There were at least five companies, including Torrent, which manufactured Penicillin G in the country in the 90s. But the prices of the Chinese products were so low that the Indian manufacturers went out of business.
- There were nearly 2,000 API manufacturers in India in the early 90s. But there were nearly 10,000 units that manufactured formulations.
- And, for them, the cheaper Chinese products made more sense, especially at a time when the country’s economy was opening up and customs rules were relaxed.
- The Drug Prices Control Order — which capped prices of essential medicines — also ensured that more companies went for cheaper imported products.”
- Citing the example of paracetamol, India used to sell it for around Rs 800 per kg at the time, but China brought the prices down to nearly Rs 400 per kg, making it unviable for Indian manufacturers.
- The production of Penicillin will be restarted by mid-2024 by Hyderabad-based Aurobindo pharma.
Resumption Efforts and PLI Scheme:
- The government’s Production Linked Incentive Scheme, initiated during the pandemic, played a pivotal role in reinvigorating domestic manufacturing.
- The scheme provides incentives to companies based on incremental sales, aiming to reduce reliance on imports and enhance self-sufficiency.
- The revival of Penicillin G manufacturing will be spearheaded by Aurobindo Pharma, based in Hyderabad, with production slated to commence by mid-2024.
Structure of the PLI Scheme:
- Support Mechanism: The PLI scheme provides support in the form of incentives, with a 20% support for the first four years, 15% for the fifth year, and 5% for the sixth year on eligible sales of fermentation-based bulk drugs like antibiotics, enzymes, and hormones.
- Incentives for Chemically Synthesized Drugs: For chemically synthesized drugs, the incentive rate is 10% for six years on eligible sales.
- Over the next five years, the PLI scheme is projected to lead to a total production value of approximately INR 10.5 lakh crore.
- More than 60% of this production is expected to be exported.
- Additionally, the scheme aims to attract additional investment of INR 11,000 crore.
Penicillin:
- Penicillin is one of the most commonly used antibiotics globally.
- It has a wide range of clinical indications.
- Penicillin is effective against many different infections involving gram-positive cocci, gram-positive rods (e.g., Listeria), most anaerobes, and gram-negative cocci (e.g., Neisseria).
- Importantly, certain bacterial species have obtained penicillin resistance, including enterococci.
- Enterococci infections now receive treatment with a combination of penicillin and streptomycin or gentamicin.
- Certain gram-negative rods are also resistant to penicillin due to penicillin’s poor ability to penetrate the porin channel.
- However, later generations of broad-spectrum penicillins are effective against gram-negative rods.