The government plans to establish a minimum import price for penicillin, a strategic move designed to bolster domestic Active Pharmaceutical Ingredient (API) manufacturing under the Production Linked Incentive (PLI) scheme. This policy intervention represents a significant step toward reducing India's dependence on imported APIs and strengthening the country's pharmaceutical manufacturing ecosystem.

Policy Framework and Objectives

The minimum import price mechanism aims to create a protective framework for domestic penicillin manufacturers by establishing a floor price for imported penicillin. This approach intends to level the playing field between local producers and international suppliers, potentially making domestic manufacturing more economically attractive.

Potential Impact on Pharmaceutical Sector

The implementation of minimum import pricing could provide several benefits to the domestic pharmaceutical industry. Aurobindo Pharma and other pharmaceutical manufacturers may potentially benefit from this policy framework, as it aims to create favorable conditions for expanding local API production capabilities.

Potential advantages of this policy may include:

• Enhanced price competitiveness for domestic manufacturers
• Reduced reliance on imported penicillin APIs
• Increased investment incentives under the PLI scheme
• Strengthened supply chain security for critical antibiotics

Strategic Significance

Penicillin remains one of the most widely used antibiotics globally, making its domestic production strategically important for India's healthcare security. The minimum import price policy aligns with the government's broader vision of achieving self-reliance in pharmaceutical manufacturing, particularly in critical therapeutic segments.

This initiative aims to complement existing PLI scheme benefits, potentially creating a dual advantage for manufacturers willing to invest in domestic penicillin production. The policy framework is designed to encourage both capacity expansion and technology upgrades in the API manufacturing sector.

Aurobindo Pharma shares are in focus following recent strategic developments involving its subsidiaries. The pharmaceutical company's wholly owned subsidiary CuraTeQ Biologics Private Limited has mutually agreed to terminate its licence agreement with US-based BioFactura Inc for the commercialisation of BFI-751, a proposed biosimilar of ustekinumab (Stelara). The termination, effective December 27, 2025, follows a strategic review and aligns with CuraTeQ's portfolio prioritisation efforts.

Agreement Termination Details

The original licence agreement was executed in July 2023 and envisaged the commercialisation of the biosimilar in regulated markets. The partnership structure included specific financial arrangements where BioFactura would receive licence fees and milestone payments, while CuraTeQ held global manufacturing rights under a profit-sharing structure.

Chinese Joint Venture Expansion

In a separate development, Aurobindo Pharma's wholly-owned subsidiary Helix Healthcare BV has entered a binding agreement to acquire an additional 20% stake in Luoxin Aurovitas Pharma (Chengdu) Co. Ltd., China for $5.13 million. The transaction will raise Helix's ownership in the joint venture to 50%.

Currently, Luoxin Aurovitas operates as a 30:70 joint venture between Helix and Shangdong Luoxin Pharmaceutical Group Stock Co. Ltd. The acquisition is expected to be completed within the next three months.

Strategic Impact and Market Performance

Aurobindo Pharma has clarified that the BioFactura agreement termination was reached by mutual consent and is not expected to have any material impact on its overall biosimilars strategy. The decision represents part of CuraTeQ's ongoing strategic portfolio prioritisation efforts following a comprehensive review, reflecting the company's focus on optimising its biosimilars pipeline.

Shares of Aurobindo Pharma ended the previous session 0.30% lower at ₹1,208.30 apiece. The stock has declined 10.70% during the current year, reflecting broader market dynamics in the pharmaceutical sector.