The Union Ministry of Chemicals and Fertilizers (C&F) is likely to propose revised norms for gold standard (R&D intensive) pharmaceutical companies for availing price benefits and fiscal incentives on indigenously developed products. The companies fulfilling these conditions may be allowed to charge 200% on the ex-factory cost as maximum allowable post manufacturing expenses. A minimum investment of Rs 50 crore per annum on research facilities and employment of at least 300 scientists may become the basic criteria for being considered as an R&D intensive company.
The companies belonging to this category may also require owning and operating manufacturing facilities in India which have been approved by at least two reputed foreign regulatory agencies. The companies should own at least 20 patents based on indigenous research. As per the current plan, the National Pharmaceutical Pricing Authority (NPPA) would be asked to conduct an annual evaluation on the status of these companies. Only those companies which continue to satisfy all the conditions would be given extended recognition as gold standard company.
The proposal is on the basis of the recommendations made by the Pharmaceutical Research and Development Committee (PRDC) headed by Dr R A Mashelkar six years ago. To qualify as R&D intensive company in India, the PRDC has suggested an minimum investment of 5% of the annual turnover R&D, investment of at least Rs.10 crore per annum in innovative research including new drug development, new delivery systems etc. in India, employment of at least 100 research scientists in R&D in India, ownership of at least 10 patents for research conducted in India and owning and operating manufacturing facilities in India. The ministry proposes to effect the revisions in the conditions after taking into account the changes taken place during the last five years since the recommendations were made.
It should be noted that the Confederation of Indian Industry (CII) in its comments on the report of the Pronab Sen Committee on drugs few months ago, wanted the government to provide special allowances to R&D led companies qualifying as 'gold standard' as per the Mashelkar report.