In an attempt to support and encourage the drug development in the country, the Department of Pharmaceuticals (DoP) will soon set up a Rs. 2,000 crore Venture Capital (VC) fund. However, initially the government would start the project with around Rs. 500 crore.
DoP secretary Mukul Joshi said that the proposed VC fund is in its conceptual stage at present but will start on as soon as the DoP sets up the national authority. "We are in the process of setting up a national authority, which will be in place in two to three months. As soon as that is in place we will start working on various initiatives that we have outlined, VC fund for drug development is one among them."
This initiative is to provide financial aid to the pharma companies who are interested in drug development. Setting up of venture capital fund is to address the lack of early stage venture capital in the country for drug development.
DoP had appointed IIM, Ahmedabad as a pre-consultant on this matter and will soon appoint a consultant to get the details of the pre-requisites for setting up the proposed VC fund. "Through this scheme we intend to provide financial assistance to the companies for drug development and hope that more and more companies will be interested in it. We will be partnering with financial institutions and banks for this initiative," Joshi informed.
Lack of new drugs due to low percentage of drug discovery initiatives is a major concern faced by the pharma industry today. There are very few companies who are investing in the R&D due to spiralling cost of research and cash crunch which in turn is leading to drying R&D pipeline, coupled with poor productivity. To keep a tab on this it is necessary that government takes such initiative to develop drug discovery in the country, especially since India is emerging as a favourable country for research collaboration to provide solutions through cost competitiveness and innovative drug discovery capabilities, Joshi said.
In the past also the government had initiated similar kind of steps to encourage public private partnership or direct investments towards discovery related activities in private sectors. However, the outcome of all these initiatives indicates that these initiatives have not been able to win the confidence of the industries so far and the overall impact and effectiveness of such measures may require close monitoring.