New Delhi: The country’s department of pharmaceuticals plans to provide financial assistance to micro, small and medium enterprises, or MSMEs, in the pharmaceutical sector for upgrading their facilities to meet manufacturing rules laid down by the ministry of health and family welfare, according to two government officials.
“Under this scheme, the MSMEs will get subsidy from us, under the department of MSME’s credit-linked capital subsidy scheme... Currently, the subsidy for pharmaceutical manufacturers is not enough,” said Ashok Kumar, secretary, department of pharmaceuticals under the ministry of fertilizers, chemicals and petrochemicals.
“We are holding discussions with the department of MSME and the scheme should be finalized by the end of this month or early April,” Kumar added.
This move comes after a parliamentary panel submitted a report in February on the amendment to so-called good manufacturing practices outlined in Schedule M of the Drugs and Cosmetics Rule, that is aimed at ensuring that manufacturing units comply with global standards of production.
“Of course, the recommendations of the standing committee will also be looked into. The health ministry has also conveyed to us that it has no objection to our scheme,” Kumar said.
The department of MSME currently gives subsidy to small and medium enterprises, or SMEs, but, following the implementation of the revised Schedule M in 2005, this subsidy of up to Rs15 lakh has proved insufficient considering the changes various manufacturing units have to make.
In fact, within a year after its implementation in 2005, 185 MSMEs closed down in Maharashtra and 89 in Haryana.
“After that additional licences to manufacture were not renewed for units if they didn’t comply with Schedule M. So, many more closed down but that has not been documented,” said Jagdeep Singh, secretary general, SME Pharma Industries Confederation, or SPIC, an industry group.
“For the proposed scheme, we have to continue to have discussions (with the department of pharmaceuticals) and we are going to have discussions in the next week too,” a senior official involved in the discussions at the department of MSME said on condition of anonymity.
In a submission to the parliamentary panel, the health ministry said that “on an average, 80% of Schedule M norms require change of mind set of technical persons… This does not call for any investment but requires good documentation. The rest 20% requires change in infrastructure facilities which may involve some financial investment”.
But small-scale industrialist argue that revised Schedule M rules are tough to implement without financial assistance. “It is clear that the government does not want to compromise on quality, but they have to realize that Schedule M is very general and difficult for SMEs to implement,” said T.S. Jaishankar, chairman, Confederation of Indian Pharmaceutical Industry.
Regulatory experts also argue that the 20% change required in infrastructure includes additional space requirement, which is not possible for many units.
“You cannot have a rule which is retrospective. Compared with the old schedule M, the amended one has so many structural and location changes. We have no problem with equipment changes and technological changes but just the infrastructural changes can cost anything between Rs1 crore and Rs3 crore,” said Chandra M. Gulati, editor, Monthly Index of Medical Specialities.
Currently, the subsidy available under the department of MSME’s subsidy scheme provides just for modernization and technology upgrade in small sector, not infrastructure expenses.
“Isolated decisions without collective responsibility within various government departments are responsible for policies gradually leading to elimination of small and medium pharma units in its contribution towards providing quality medicines at affordable prices,” said Lalit Jain, vice-chairman, SPIC, adding the government needed to take a stance that is in public interest.