1. Introduction

The new track seeks to address a major challenge in pharmaceutical innovation: limited access to funding during the initial stages of drug discovery, when projects involve considerable scientific and commercial risks. Under the initiative, eligible start-ups and MSMEs can receive financial assistance of up to ₹50 crore per company, project or portfolio of projects, subject to a minimum 25% co-funding from bona fide institutional investors.

The initiative focuses particularly on New Chemical Entities (NCEs) and New Biological Entities (NBEs) and aims to strengthen India’s domestic drug discovery capabilities and pharmaceutical innovation pipeline.

2. Origin and Intent

The broader objective of the scheme is to strengthen research and development in the pharmaceutical and medical technology sectors and encourage greater participation from industry in innovation.

The addition of the New Discovery track expands government support to the earliest stages of drug development. It is intended for NCE and NBE projects at Technology Readiness Levels (TRLs) 1 to 3, covering early research and proof-of-concept stages. Support under the track can help projects progress towards TRL 6.

The second call under the PRIP Scheme covers three broad areas: new medicines, including NCEs, NBEs and phytopharmaceutical drugs; complex generics and biosimilars; and novel medical devices.

The first call resulted in the approval of 41 projects involving around ₹1,600 crore in financial assistance, while other applications remain under evaluation. The portal has now been opened for the second call.

3. Key Features

The New Discovery track provides a higher level of financial support than the existing Early Stage track. The major provisions are:

Track	Eligible Projects	Financial Assistance
New Discovery	Start-ups and MSMEs developing NCEs and NBEs at TRL 1–3	Up to ₹50 crore per company, project or portfolio, with minimum 25% institutional-investor co-funding; support up to TRL 6
Early Stage	Start-ups and MSMEs with projects at TRL 1–3	Up to ₹5 crore per project, supporting development up to TRL 5
Later Stage	Industry, start-ups and MSMEs with projects at TRL 4–6	Up to ₹100 crore per project, subject to a maximum of 35% of approved project cost

The New Discovery track is therefore positioned specifically to support projects before they reach the more advanced stages of development. The requirement for institutional-investor participation also brings private capital into the early discovery process.

4. Impact

Drug discovery is a lengthy and resource-intensive process, with substantial investment often required before a potential medicine can reach clinical development. Early-stage projects can face difficulty in attracting private investment because their scientific outcomes and commercial prospects remain uncertain.

The New Discovery track is intended to help bridge this funding gap by providing government assistance at the discovery stage while also encouraging institutional investors to participate. This combination could provide start-ups and MSMEs with greater financial support to undertake research, validate potential drug candidates and advance promising projects to subsequent stages.

The initiative may also encourage more Indian companies to undertake research on NCEs and NBEs, potentially increasing the number of indigenous drug candidates progressing from laboratory research towards clinical development.

Over time, greater support for early-stage innovation could strengthen collaboration between start-ups, researchers, investors and established pharmaceutical companies and contribute to the development of a stronger domestic pharmaceutical research ecosystem.

5. Conclusion

The introduction of the New Discovery track expands the PRIP Scheme’s focus towards the high-risk, early stages of pharmaceutical innovation. Financial assistance of up to ₹50 crore, combined with institutional-investor participation, provides a structured mechanism to support Indian start-ups and MSMEs developing new drug candidates.

The long-term outcome will depend on how effectively supported projects progress through subsequent stages of research and development. Nevertheless, the initiative provides additional financial support at a stage where promising pharmaceutical research can face significant funding challenges, while also seeking to increase private-sector participation in India’s drug discovery ecosystem.