Sick drug making PSUs to get a lifeline from government

IN A bid to revive sick drug making PSUs, the government is working to revive state-owned sick drug manufacturing companies like Indian Drugs and Pharmaceuticals Ltd (IDPL), Hindustan Antibiotics and Bengal Chemicals...

to make available essential medicines like antiretrovirals, cancer drugs, complex antibiotics and medicines used in treatment of tuberculosis.

This is in line with Prime Minister Narendra Modi’s ambitious Make in India initiative.  

It has been observed that these essential drugs are found to be scarce mainly the ones distributed through government health programmes. By using the capacities available at PSUs, the government can not only meet the demand but also cut down prices.

At present, these PSUs are in bad shape reeling under huge debt burden. Some PSUs like Hindustan Antibiotics are not even able to pay salaries to their employees, often leading to strikes and protests.

IDPL is also struggling with a debt of over Rs 3,000 crore, whereas Hindustan Antibiotics has over Rs 300 crore of debt.

The department of pharmaceuticals (DoP), under the ministry of chemicals and fertilizers, is preparing a Cabinet note for revival of these companies.

Among a slew of measures, the department is likely to propose part divestment of the huge land bank available with these firms to repay the enormous debt, which is creating hurdles in smooth functioning of many of these firms.

IDPL owns around 2,000 acres spread across Gurgaon, Rishikesh and Chennai. Hindustan Antibiotics is sitting on 270 acres of land assets, mostly in Pune.

Under the scheme, the government will pump in funds and restart production.

This will not only help these companies and their employees but will also help the country get many essential medicines at cheap prices, the official said. Once revived, these companies will also gradually ramp up production and start manufacturing other critical drugs. The department has also written to the health ministry asking it to start placing orders with these public sector companies. Now, the health ministry procures around Rs 500 crore worth of medicines annually for its AIDS control programme alone. It has many such programmes for vaccines and other medicines.  According to an estimate, PSU pharma companies are making 130-140 medicines including antibiotics and vaccines used in government programmes. The consolidated annual turnover is estimated at Rs 500-550 crore, whereas the retail domestic drug market is estimated at Rs 79,000 crore.