Govt Offers Startups Up To ₹50 Cr For New Drug Discovery Under Pharma Scheme

(MENAFN- Live Mint) New Delhi: India's Department of Pharmaceuticals has invited applications for the second round of its Promotion of Research and Innovation in Pharma & MedTech (PRIP) scheme, offering startups and micro, small, and medium enterprises (MSMEs) up to ₹50 crore each for new drug discovery, the government said on Thursday.

The PRIP scheme has a total financial outlay of 5,000 crore"> ₹5,000 crore, which includes ₹700 crore to establish Centers of Excellence (CoEs) at seven National Institutes of Pharmaceutical Education & Research (NIPERs), and ₹4,200 crore to accelerate investments in the R&D ecosystem within the sector. The initiative will operate until the financial year 2029–30.

Highlighting the purpose of this second round of funding, the government said,“The second call offers a fresh opportunity for eligible industry, startups and MSMEs to undertake high-potential research and innovation in the pharmaceutical and MedTech sectors.”

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“The second call covers three priority areas: new medicines-including new chemical entities (NCEs), new biological entities (NBEs) and phytopharmaceutical drugs; complex generics and biosimilars; and novel medical devices," the government said in a statement.

The first call under PRIP, announced on 30 September 2026, approved approximately ₹1,600 crore in financial assistance for 41 innovation projects. This grant is expected to draw ₹3,020 crore in private co-funding, mobilizing an estimated ₹4,620 crore in total R&D investment across pharma and MedTech.

The newly-added Discovery Track in the second round was created to address funding shortfalls that small firms encounter during the transition from basic laboratory research to advanced experimental stages.

Highlighting the distinct focus of this new window, the government said,“While the early stage track provides support for a wider range of early-stage PRIP projects, the new discovery track is specifically structured to provide larger and sustained support for indigenous NCE and NBE drug-discovery programmes, while bringing institutional capital into the development pathway.”

According to the department, this track supports early-stage drug creation involving chemical and biological entities, assisting their progress up to advanced prototype and animal testing stages. To receive this grant, applicant companies must secure a minimum of 25% of their total project expenditure from bona fide institutional investors.

Alongside the Discovery Track, the department has structured the second call into two other funding tiers determined by the technical maturity of each project.

The early stage track is open to startups and smaller enterprises working on early laboratory research across all three priority sectors. This track offers financial aid of up to ₹5 crore per project to help technologies reach the prototype stage. For projects with an approved cost of up to ₹1 crore, the government provides the entire amount without requiring financial contributions from the applicant. If the project budget exceeds ₹1 crore, the applicant must contribute half of the amount that sits above that limit.

The later stage track is accessible to larger industry players, startups, and smaller enterprises that already possess working prototypes or early experimental data. This track offers support of up to ₹100 crore per project to help candidates progress through formal testing stages. The department caps funding under this tier at 35% of the approved total project cost, leaving the applicant responsible for funding the remaining 65%.

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The department stated that applicants must ensure that the developmental goals and targets of their proposals can be achieved within the scheme's lifespan, which concludes in 2029–30. Projects that require a longer overall development cycle remain eligible to apply, but funding will cover only the milestones scheduled for completion before the end of the term.

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The department set 10 November 2026 as the final submission date for all applications under the second call. A dedicated committee will review and evaluate incoming submissions on a regular schedule based on verified evidence of project readiness, development timelines, and compliance with the co-funding criteria outlined in the official guidelines.

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