The Department of Science and Technology (DST) has suggested private contributions to enhance the scope of the much talked about Pharma R&D Fund (PRDF). The DST is to interact with the Finance Ministry to chalk out incentive schemes for Indian pharmaceutical industry majors who want to contribute their share to the Pharma R&D Corpus. The department would try to get 100% tax exemption announced for all funds that are to reach the corpus, it is learnt.

The response is based on the pharmaceutical industry's observations that the proposed yearly allocation from the pharma fund would not be sufficient to promote meaningful R&D among the industry and institutions.

As of now, the government has allocated Rs 150 crore to DST to be disbursed as PRDF. However, the department has decided to set apart the amount as a corpus and utilize the interest generated as PRDF. The interest amount is to be Rs 20 crore approximately and will be available only from the next financial year. The government intends to make the funds available to both government institutions as well as private companies even if there is no institutional participation.

The only fall out of the announcement of the fund is the decision of the Planning Commission to stop allotting separate funds to the department for running its Drugs & Pharmaceutical Research Programme from the coming year. Ministry sources said that the DPRP scheme would continue but will be part of the bigger R&D funding programme now being introduced by the government. NO separate allocation of funds will be there for DPRP, it is learnt. There was an annual allocation of Rs 10 crore for DPRP scheme which was specifically given to government-industry partnership programmes. Now that there is no separate allotment, the entire amount should come from the interest generated from the corpus amount.

The industry, during a recent consultation with the department informed that the Rs 20 crore corpus would not be sufficient for strengthening the public sector institutions, promote private R&D and also be disbursed as grants for public-private joint research programmes. The option before the department now is to either dedicate the funds for developing common research and testing facilities at the national level, or generate more funds for individual disbursal at a larger scale. The plan for inviting donations from the industry is rooted in this dilemma being faced by the department.

Speaking to Pharmabiz.com, senior DST officials said that they are in the process of finalising disbursement modalities for PRDF. Regarding the consultations it had with the industry, officials' felt that the industry was not so enthusiastic towards the idea of contributing funds. They felt that the incentives might attract some of them to participate in the programme.