The Katoch committee on Active Pharmaceuticals Ingredients (APIs), constituted by the department of pharmaceuticals (DoP) to formulate a long term policy and strategy for promoting domestic manufacture of APIs/bulk drugs in the country, has recommended establishment of large manufacturing zones (LMZs)/mega parks for APIs with common facilities maintained by a separate special purpose vehicles (SPV).

To begin with, such facilities will need to be provided at a concessional rate and preferably free of cost. This will help "in competing with the other countries and also generating large employment. Such mega parks need to be provided with common facilities such common effluent treatment plants (ETPs), testing facilities, captive power plants/assured power supply by state systems, common utilities/services such as storage, testing laboratories, IPR management, designing, guest house/accommodation, etc, the panel recommended.

These zones should be attached with power plants and solvent yards. These zones could be set up in National Manufacturing Investment ZonesIPetroleum, Chemicals and Petrochemical Investment Regions (PCPIRs.in states that have the requisite facilities/systems in place. The state like Gujarat, Andhra Pradesh, Tamil Nadu and Odisha could be consulted and they could allocate the land and provide other facilities. Parks could be set up in the vicinity of mega complexes where chemicals meant for further stages in producing APIs could be produced, the panel said.

On the controversial pollution issue, the panel said that the bulk drug industry including those involved in the production of APIs is one of the major polluting industries. The cost of the pollution control is very high as it requires highly capital intensive technology to treat pollution. It is, therefore, necessary to have proper rules and regulations to have check on the pollution level and the quality of the output. But at the same time there is a need to come out with procedures of implementation which are efficient and effective which include aligning the provisions of the Acts and Rules regarding pollution, quality control, custom and excise duty, export bodies (DGFT), coal allocating bodies, electricity authorities to have a cell in the mega complexes proposed for the bulk drugs.

Six large API intermediate clusters in five to six states are expected to transform the nation. Keeping in view the urgency it would be necessary to start with at least two fully financed clusters (one focused on fermentation and other on APIs) in the immediate future, this process may be driven by an Empowered Committee for taking decisions in a time bound manner. An average cluster will require about 1000 to 2000 hectares of land and will require about Rs.750-1000 crore investment for common facilities/services if all requisite schemes are developed and implemented in near future within 3-6 months.

These parks could be allotted to large bulk, medium and small manufacturers on the basis of a formula to be specified in the guidelines which may be prepared by the DoP. Because of similarities in technologies for chemical or fermentation technologies, separate parks for such manufacturers will be desirable. One such functional cluster can bring benefit of around one billion dollar/Rs.60 billion per year. It is felt that three clusters may succeed in wiping out dependence in the area of APIs, the panel recommended.