Small pharma units fail to meet Schedule M norms

Almost half the small-scale units in the state are yet to adhere to the revised Schedule M guidelines of the Drugs and Cosmetics Act. This despite the deadline being extended several times.

There are around 800 SSI pharmaceutical units in the state. All of these were required to adhere to schedule M guidelines by December 31, 2004. However, according to the Gujarat Food and Drugs Control Administration (FDCA), just over half of the units have adhered to the guidelines so far.

The deadline for meeting these guidelines was extended to June 2005 last month.

According to the revised schedule M guidelines of the Drugs and Cosmetics Act, all pharmaceutical units are required to ensure that their air and water handling systems are of high standard, control systems are in place and proper documentation is maintained.

This requires an investment of around Rs 40 to 50 lakh, which could be the biggest challenge for the smaller companies.

State FDCA commissioner S P Adeshara said:- "Those who really wanted to adhere to the guidelines, have already done so. I do not think that the units that are yet to meet the deadline will actually be able to do so by June 30, 2005."

He pointed to a more serious problem that the small scale pharmaceutical companies have begun to face. Several medium and large pharmaceutical companies have been migrating to other states that have a long-term excise holiday package.

"Most of the smaller units survive on contract manufacturing and ,with the exodus of the larger companies, they are being left with no jobs," said the FDCA commissioner.

The Schedule M guidelines were originally scheduled to come into force from January 1, 2003. It was then postponed to January 1, 2004 and again to December 2004 after a series of representations made by several associations of pharmaceutical industries and even some state governments.

By mid 2004, the central government made it clear that it will not extend the deadline beyond December 31, 2004.

Accordingly, the Food and Drugs Control Administration (FDCA) Gujarat had warned that from January 1, 2005, it would begin issuing notices and take action against companies that do not comply with the revised guidelines. However, the deadline has now been extended further by another six months.

'Severe competition will slow down growth'

The introduction of product patent and the competition will slowdown the growth rate in the Indian pharmaceuticals industry. The growth rate in the sector has already been reduced to around 8 per cent from over 15-20 per cent, 5 years back.

"The growth rate in the Indian pharma sector may further drop in the near future as copying of the patented drugs will no more be possible as India has accepted the Product Patent from January 1, 2005," said C M Gupta, director, Central Drug Research Institute (CDRI), Lucknow.

He was in Ahmedabad to a to attend a seminar on 'Drug Discovery, Development and Delivery in 21st century: Academic - Industry Synergy.'

The Indian pharmaceuticals sector accounts for eight per cent of the global pharmaceuticals production by volume, although by value its is only about one per cent.

The Indian pharmaceuticals industry has made its presence felt in the world market with its quality drugs at competitive prices. The industry is net export earner and is self sufficient in both the bulk drugs and formulations.

"Only after 1970, the phenomenal growth of the industry was possible with Patent Act, which protected this industry against MNCs. However, with the opening of the Indian economy, the Indian pharma industry is finding it difficult to sustain its two-digit growth rate due to fierce competition from MNCs," said Gupta.