The Hindu Business Line : Centre’s pharma research fund dissolved

Problem fund
The Centre had planned to increase the corpus amount to Rs 750 crore in five years
The fund ran into jurisdiction problem between the nodal ministry for pharmaceuticals, and the DST.

P.T. Jyothi Datta

Mumbai, Feb. 12 The Centre’s Rs 150-crore fund, announced about seven years ago to support pharmaceutical research, has been given a silent burial.

Confirming that the fund has indeed been dissolved, an official with the Ministry of Science and Technology told Business Line that it has, however, been replaced by an annual budgetary support given by the Centre to the Department of Science and Technology (DST). This could be tapped by partnership projects between public institutions and industry, the official said.

Controversy

The pharma research fund had been mired in controversy, ever since it was announced in the Union Budget of 2000-01. Though the Centre had planned to increase the corpus amount to Rs 750 crore in five years, the research fund first ran into issues of jurisdiction.

It remained to be sorted out whether the fund would be administered by the nodal ministry for pharmaceuticals, i.e., the Chemicals and Fertilizers’ Ministry or the DST.

Subsequently, the fund went into the DST fold, but a new problem arose on the amount available for research. Only interest on the fund, or about Rs 9 crore, was actually available to the industry and this upset pharmaceutical companies as drug development is an expensive process, fraught with risk.

Finally it was decided to dissolve the fund and have instead an annual budgetary allocation, the official said. This year, ending March 2008, the allocation is Rs 118 crore. Last year, though the budgetary allocation was Rs 100 crore, the actual project allocation was only about Rs 60-odd crore, the official said.

Partnership

Companies have to partner with government-funded institutions and the joint proposal they make to the DST then gets evaluated and funded. The fund is given to the industry as a loan at 3 per cent interest, while it is a grant to the institution, the official explained. The total allocation in the Eleventh Five Year Plan (2007 to 2012) towards this purpose is Rs 500 crore, he said.

A pharma industry representative said that another niggling issue is that companies are secretive about sharing their research data with any institution, as intellectual property (IP) is involved. But the Ministry official countered that IP is shared between both parties, in a joint collaboration. And if the lead is from industry, the IP can remain with the company. There is even a system of royalty payment worked out if a product is commercialized, he said, adding that the pharma industry needs to be more dynamic in utilising these funds set aside by the Government for research.

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