After announcing the size, details and even inviting the tender, the Department of Pharmaceuticals (DoP) seems to have backtracked on its ambitious proposal to set up a venture fund of Rs.10,000 crore to incentivise the pharmaceutical drug discovery and innovation in the country.

After inviting tenders many months back to appoint the advisor for the fund, now the DoP has stated that the very proposal itself was still under consideration. “The DoP is in the process of examining a proposal to set up a venture fund for promoting pharma drug discovery and innovation. Details including size etc. are being worked out with the help of National Institute of Public Finance and Policy,” according to a statement by the Minister of State for Chemicals and Fertilizers Srikant Kumar Jena in the Parliament recently.

However, when contacted by Pharmabiz, a DoP official said the proposal has not been dropped and the department was still examining the responses received in the tendeRs.The department will soon shortlist the names for the advisor.

Though the Department had put September 27 as the last date for submission of tenders for selecting the advisor, it is yet to be announce the further move of the proposal. The department first invited bids on July 25, 2010 for selecting the advisor and the last date for submission of tenders was August 16. However, it was extended later till September 27, amid apprehensions that the initial notification could not generate sufficient enthusiasm in the industry

The proposed funding of Rs.10,000 crore, which includes substantial contribution from the private pharma industry under the public private partnership model, is aimed at creating a favourable environment for drug innovation in the country and to make India a hub for new drug discoveries.

Last year, the Department had prepared a white paper on promoting research and development funding in the country, and submitted the proposal to the Prime Minister's Office for approval. As per the proposal, the government wanted to undertake pro-active steps on four fronts -- building infrastructure for talent and research, encouraging public-private partnerships in infrastructure development, providing financial incentives to encourage innovation, and shaping a favourable regulatory environment. The fund is meant to be used on these aspects.