Himachal Pradesh is one of the states vying for the allotment of a bulk drug park under a central government scheme announced earlier this year for setting up three such parks across the country.

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Q.The drug pricing system in India is an indirect outcome of the growing dependence on China for APIs. Discuss.

What are Bulk Drugs or APIs?

• A bulk drug also called an active pharmaceutical ingredient (API), is the key ingredient of a drug or medicine, which lends it the desired therapeutic effect or produces the intended pharmacological activity.
• For example, paracetamol is a bulk drug, which acts against pain.
• It is mixed with binding agents or solvents to prepare the finished pharmaceutical product, ie a paracetamol tablet, capsule or syrup, which is consumed by the patient.
• APIs are prepared from multiple reactions involving chemicals and solvents.
• The primary chemical or the basic raw material which undergoes reactions to form an API is called the key starting material, or KSM.
• Chemical compounds formed during the intermediate stages during these reactions are called drug intermediates or DIs.

Why is India promoting bulk drug parks?

• India has one of the largest pharmaceutical industries in the world (third largest by volume) but this industry largely depends on other countries, particularly China, for importing APIs, DIs and KSMs.
• This year, drug manufacturers in India suffered repeated setbacks due to disruption in imports.
• Factories in China shut down when the country went into a lockdown, and later, international supply chains were affected as the Covid pandemic gripped the entire world.
• The border conflict between India and China exacerbated the situation.

What is the Centre’s scheme?

• The Centre’s scheme will support three selected parks in the country by providing a one-time grant-in-aid for the creation of common infrastructure facilities.
• The grant-in-aid will be 70 per cent of the cost of the common facilities but in the case of Himachal Pradesh and other hill states, it will be 90 per cent.
• The Centre will provide a maximum of Rs 1,000 crore per park.
• A state can only propose one site, which is not less than a thousand acres in area, or not less than 700 acres in the case of hill states.

What does a bulk park offer?

• A bulk drug park will have a designated contiguous area of land with common infrastructure facilities for the exclusive manufacture of APIs, DIs or KSMs, and also a common waste management system.
• These parks are expected to bring down manufacturing costs of bulk drugs in the country and increase competitiveness in the domestic bulk drug industry.

Why Himachal?

• Himachal already has Asia’s largest pharma manufacturing hub, that is the Baddi-Barotiwala-Nalagarh industrial belt, and the state produces around half of India’s total drug formulations.
• Himachal offers power and water at the lowest tariffs in the country, and the state also has an industrial gas pipeline.
• It jumped nine places in this year’s ease-of-doing-business rankings declared by the Centre last month, securing the seventh position in the country.

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