The Department of Pharmaceuticals (DoP)'s ambitious plan of floating a venture fund to the tune of Rs.10,000 crore to incentivise the pharmaceutical drug discovery and innovation in the country is virtually remaining in limbo, with the department lingering on with no commitment on the future of the same.

After announcing the size, details and even inviting the tender, the DoP now said it was still consulting the National Institute of Financial Policy and Planning to prepare a detailed project report for the proposed fund.

“The matter is being expedited. The department held a meeting recently with the Institute for structuring the fund. It also has been sent to the Planning Commission for in-principle approval,” sources said, without fixing any timeline for the proposal which has been under process for nearly two years now.

The fund also has found a place in the proposed National Pharmaceutical Pricing Policy drafted by the DoP. “Promotion of research and development in the pharmaceutical sector, directly through research institutions and universities, as well as through provision of seed capital, venture capital funding and subsidies to innovative drug companies,” the policy has put as component.

The Parliamentary Standing Committee attached to the Chemicals Ministry also has recently called for speeding up the matter and urged the Planning Commission to approve it at the earliest. “The Committee note that the Department is in the process of finalization a Pharma R&D Venture Fund which would cater to the requirement of Research and Development of Drug discovery and innovation. However, while allowing the Venture fund to cater to the requirement of fund for R&D the Committee expect the Department to take all care for indigenous patenting of such research and innovation. As per the scheme, the Government would provide an initial corpus that would leverage such amount in raising resources from public and private institute as well as from existing funds within India and overseas,” it said.

Though the Department had put September 27 as the last date for submission of tenders for selecting the advisor, it is yet to be announced to further move 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, 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.