Centre Launches ₹5,000 Crore Scheme to Boost Pharma and MedTech R&D

The Government of India has announced a major ₹5,000 crore initiative to accelerate research and innovation in the pharmaceutical and medical technology sectors. The scheme, known as the Promotion of Research and Innovation in Pharma MedTech Sector (PRIP), will be implemented between FY 2023–24 and FY 2029–30. Its objective is to transform India from a volume-driven generic drug producer into an innovation-led global leader in life sciences.

Addressing the Need for Innovation

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

India’s pharmaceutical industry, while being a global supplier of affordable medicines, continues to depend heavily on generic drug production. The country’s global market share is just 3.4%, compared to the United States and China, where pharmaceutical R&D investments stand at $50–60 billion and $15–20 billion, respectively. India’s current R&D spending is merely around $3 billion.

Similarly, the medical devices sector remains underdeveloped, accounting for only 1.5% of the global market. The country still imports 70–80% of its medical device requirements. The PRIP scheme seeks to correct this imbalance by fostering a robust domestic innovation ecosystem and reducing dependence on imports.

Key Features of the PRIP Scheme

The PRIP scheme has two main components — Centres of Excellence (CoEs) and Industry R&D Support.

Under the first component, ₹700 crore will be used to establish seven CoEs at National Institutes of Pharmaceutical Education and Research (NIPERs) across India. Each centre will specialise in key research areas such as antiviral and antibacterial drug discovery, medical devices, bulk drugs, flow chemistry, novel drug delivery systems, phytopharmaceuticals, and biological therapeutics.

The second component, with a budget of ₹4,200 crore, focuses on promoting innovation within the industry and startups. Early-stage projects can secure up to ₹5 crore in funding, with full support for projects under ₹1 crore. Later-stage projects nearing commercialisation can receive up to ₹100 crore, covering up to 35% of the total project cost. Strategic projects in public health areas, such as orphan drugs or antimicrobial resistance, may receive up to 50% funding.

Priority will be given to projects involving recognised government research institutions that demonstrate strong commercialisation potential. The scheme encourages collaborative R&D, technology licensing, and shared infrastructure use.

Benefit-Sharing and Oversight

The government has adopted a ‘Benefit-Share’ mechanism, ensuring companies that benefit from PRIP contribute back through royalties, equity, or tiered payouts. For instance, later-stage projects must repay 150% of the total financial support, either via royalties (4–12% of net sales) or equivalent equity.

A Project Management Agency will oversee the implementation, fund allocation, and monitoring of projects under the supervision of an Empowered Committee led by the CEO of NITI Aayog. Supporting committees comprising experts from academia, industry, and government will ensure transparent evaluation and governance.

Industry Reaction and Outlook

Industry leaders have welcomed the initiative, calling it a long-awaited step towards strengthening India’s innovation ecosystem. According to Sudarshan Jain, Secretary General of the Indian Pharmaceutical Alliance, the PRIP scheme “will propel Indian pharma from volume leadership to value leadership by building strong innovation capabilities.”

By 2030, it is anticipated that the program will assist India in gaining a greater portion of the $3.2 trillion worldwide pharmaceutical innovation industry, turning the nation into a competitive centre for high-value R&D and cutting-edge MedTech creation.