Indications are that the minister of chemicals and fertilisers Suresh P Prabhu has already forwarded a proposal to set up a Pharmaceutical R&D Support Fund (PRDSF) - an issue that was elaborately discussed at Tuesday's meeting.

The details of the R&D fund, industry sources say, are expected to be announced during the forthcoming session of Parliament and a provision made in the budget for the current fiscal. Other issues that may feature in the next session are the continuation of export benefits, duty exemption on equipment, further tax exemptions on R&D expenditure and even a reduction in the rigours of the DPCO.

Industry sources said that Sinha set the tone of the meeting with a sympathetic one-liner which said that he understands why ``the pharma industry ko gussa ata hai'' and will work with industry to exploit its immense potential.

To a specific suggestion on implementing the Mashelkar committee recommendations on levying a surcharge on the MRP of formulations to part-finance the proposed PRDSF, Sinha said let Prabhu put forth this proposal. He, however, added that the proposed corpus was too small.The 14-member Mashelkar committee has recommended the levy of a 1 per cent surcharge on the maximum retail price (MRP) of all formulations sold within the country which could be collected by the excise authorities as a mandatory contribution to the PRDSF. This fund, the report says, could be expected to generate around Rs 100 crore annually.

Suresh Prabhu had, in his speech, emphasised the need to increase R&D spends in the pharma sector to take on the challenges emerging with the coming of the product patent regime.

The meet assumes significance given the near-neglect of the knowledge-driven pharmaceutical industry in Sinha's budget for 2000-2001 and the consequent drop in prices of almost all major pharma stocks on the bourses.

Besides Prabhu, the high-profile meet was also attended by, National Pharmaceutical Pricing Authority (NPPA) chairman Arun Kumar and secretaries from the ministry of finance and commerce and joint secretaries of the relevant ministries.

The meet, which saw Ranbaxy Labs CEO DS Brar, Glaxo and Burroughs Wellcome India managing director HR Khusrokhan and IDMA (Indian Drug Manufacturers' Association) president NH Israni make presentations, touched on issues ranging from research and development to drug price controls.

Khusrokhan elaborated on the side-effects of the DPCO, while Brar's presentation focused on the R&D aspect.

The meet was supported by three industry bodies - the Indian Pharmaceutical Alliance (the fledgling combine of eight heavy-weight domestic pharma companies), OPPI and IDMA.

Indications are that industry bigwigs also pressed for duty exemptions on equipment, consumable that go into research and development along the lines of those offered to the IT sector. To this, Sinha suggested that the industry should firm up a list of such equipment that needs this sop and put it before the ministry for consideration.

Other proposals discussed include the need for exempting royalty income from taxes, even while striving to make India a tax haven.