Govt offers startups up to ₹50 cr for new drug discovery under pharma scheme

PRIP stands for Promotion of Research and Innovation in Pharma & MedTech. It is a government funding scheme intended to strengthen research and development in India’s pharmaceutical and medical-technology sectors. Its new Discovery Track addresses a specific gap: small companies often struggle to finance the costly transition from basic laboratory research to advanced experimental work.

The track supports early-stage programmes involving new chemical entities and new biological entities. Funding can help these candidates progress toward advanced prototypes and animal testing. Applicants must obtain at least 25% of total project expenditure from bona fide institutional investors. This brings private institutional money into the development pathway alongside government support.

The second call also includes early-stage and later-stage tracks. Applications close on 10 November 2026. Projects must complete their funded milestones by the scheme’s end in financial year 2029–30, even when their full development cycle continues beyond that date.

The headline support is substantial: eligible startups and MSMEs can receive up to ₹50 crore each for new drug discovery under the second PRIP call. This targets companies developing high-potential pharmaceutical innovations, especially indigenous drug programmes that need sustained support beyond basic laboratory research.

PRIP’s total financial outlay is ₹5,000 crore. Of this, ₹700 crore is allocated to establish Centers of Excellence at seven National Institutes of Pharmaceutical Education & Research. Another ₹4,200 crore is intended to accelerate investment in the pharmaceutical and MedTech research-and-development ecosystem.

The scheme will operate until financial year 2029–30. The first call approved about ₹1,600 crore for 41 innovation projects. Those awards were expected to attract ₹3,020 crore in private co-funding, creating an estimated ₹4,620 crore in total R&D investment across pharma and MedTech.

The second PRIP call targets three broad priority areas. The first is new medicines, including new chemical entities, new biological entities and phytopharmaceutical drugs. These projects focus on creating new treatments or drug candidates rather than only reproducing existing products.

The second area covers complex generics and biosimilars. The third covers novel medical devices. Together, these categories span drug discovery, advanced versions of existing therapies and new technology for medical use. Eligibility therefore extends beyond one narrow type of pharmaceutical research.

Project maturity determines which funding track applies. Early laboratory projects across all three areas can seek early-stage support. Projects with working prototypes or early experimental data can apply through the later-stage track. The Discovery Track is specifically structured for indigenous NCE and NBE drug-discovery programmes.

The early-stage track is for startups and smaller enterprises conducting laboratory research across all three priority areas. It offers up to ₹5 crore per project. Projects costing up to ₹1 crore receive full government support; above that threshold, applicants contribute half of the excess amount.

The Discovery Track is for indigenous NCE and NBE programmes moving from basic research toward advanced prototypes and animal testing. The article describes it as offering larger, sustained support, but does not state a separate maximum grant for this track. Applicants must secure at least 25% of total project expenditure from bona fide institutional investors.

The later-stage track is open to larger companies, startups and smaller enterprises with working prototypes or early experimental data. It provides up to ₹100 crore, capped at 35% of approved project cost. Applicants fund the remaining 65%.

Discovery Track applicants must secure at least 25% of their total project expenditure from bona fide institutional investors. The requirement is linked to the track’s purpose: bringing institutional capital into the development pathway for indigenous NCE and NBE programmes.

The mechanism is straightforward. Government funding supports the programme, but the company must first demonstrate that institutional investors will finance at least one-quarter of the project’s total cost. This creates a co-funding structure rather than relying entirely on public money. It also gives the project a defined financial base for its next development stages.

The rule responds to funding shortfalls that small firms encounter between basic laboratory research and advanced experimental work. By combining government assistance with institutional funding, the Discovery Track is structured to provide larger and sustained support through advanced prototype and animal-testing milestones.

Small firms can struggle when a promising laboratory result needs more money, time and testing before it becomes an advanced experimental programme. The Discovery Track was created for this transition gap. It offers larger and sustained support for indigenous NCE and NBE drug-discovery programmes.

For example, an eligible company developing a chemical or biological drug candidate could use the support to advance it toward an advanced prototype and animal testing. The company must secure at least 25% of total project expenditure from bona fide institutional investors. Government assistance and institutional capital therefore work together across the development pathway.

The immediate change is a clearer funding window for work beyond basic research. Projects must schedule funded milestones within the scheme’s term, ending in financial year 2029–30. The article does not guarantee that any individual candidate will succeed, but the track is intended to sustain development through important early testing stages.

In established drug-development usage, a new chemical entity is a drug candidate built around a previously unapproved chemical compound. A new biological entity is a drug candidate based on a biological substance or biological mechanism, such as a therapeutic protein or antibody. These categories describe different kinds of potential medicines.

Their development is important because each candidate must be studied for its activity, safety and performance before it can become a medicine. Under PRIP’s Discovery Track, companies can receive support for early-stage programmes involving these chemical and biological entities. The work can continue toward advanced prototypes and animal testing.

The article identifies NCEs and NBEs as part of the new-medicine priority area and says the Discovery Track is specifically structured for indigenous programmes involving them. It does not state that any particular candidate will reach approval. The scheme instead funds defined development milestones through 2029–30.