Put moratorium on licensing new units to address the basic cause of current issues SPIC

Thursday, July 13, 2023

Even as the government’s decision to make Schedule M compliance compulsory for the Micro, Small and Medium Enterprises (MSME) in the pharmaceutical sector in a phased manner is a good step, there should be measures like putting a moratorium on issuing licenses to the new drug manufacturing units to reduce the fierce competition in order to address the root cause of the current issues, says Jagdeep Singh, secretary general, Small Pharma Industries Confederation (SPIC).

It is a good thing that the government has decided to implement it in a phased manner and there is no way other than that, said Singh while responding to the minister of chemicals and fertilisers and health and family welfare Dr Mansukh Mandaviya’s announcement on July 11.

However, the government should look at addressing the genesis of the issue, which is the overcapacity in the country and the resulting fierce competition in the market owing to the tax holiday policy announced way back from 2003.

“Schedule M is a dynamic process. You may comply with it today and may not be complying with it tomorrow. Not more than five per cent of the companies can comply with it at this rate. There is such fierce competition in the market, that the companies may struggle to make profit to spend on documentation, equipment required for quality control, equipment and personnel required for quality assurance. If the manufacturers are not making any money, how will they afford all these?” asked Singh.

“Even now people are setting up factories and getting licences. The government should put a 10 year moratorium on drug manufacturing licensing. Unless a unit has taken effective measures already, they should not be approved for license,” he added.

Due to the tax holidays announced for States such as Himachal Pradesh and Uttarakhand in 2003, the facilities in other States had to move to these States to save themselves from the tax burden that was there from 2005-2017.

“There is overcapacity and this has increased the competition. Anybody who sell the cheapest is sustaining in the market. The same is the case with exports. This is the genesis of the problem. If you are not addressing it, all other measures can only be cosmetic changes,” said Singh. He said that the Confederation has raised this among other points to Dr Mandaviya through representations and the Minister has considered many of its requests favourably.

On July 11, 2023, the Minister said that Schedule M shall be made compulsory for the Micro, Small and Medium Enterprises pharma sector in a phased manner, based on industry assurance, during a meeting with the representatives of MSME pharma sector. This has raised concern from various corners, since the Schedule M has been made mandatory for the pharma units in the country in 2005.

The Minister said, “This will help in quality assurance and also reduce compliance burden… It is important for MSME pharma companies to be alert to quality of drugs and expeditiously move towards Good Manufacturing Processes (GMP) through self regulation.”

The minister directed the Drugs Controller General of India (DCGI) to take stringent action against all pharmaceutical manufacturing companies that make spurious drugs.

“There shall be no compromise with the quality of drugs manufactured in India,” he emphasized. Highlighting that the Government has zero tolerance towards manufacturers not adhering to quality compliance and making spurious medicines, he stated that special squads have been formed to inspect drugs making companies and stringent actions have been taken.

The Union minister further stated that in order to ensure the highest quality of pharma products, the regulatory authorities have started risk-based inspection and audit of plants.

He stated that 137 firms were inspected, and action has been taken against 105 firms. Production has been stopped at 31 firms and Cancellation and Suspension of Product/Section Licenses have been issued against 50 firms. In addition, show cause notice has been issued to 73 firms, and warning letters have been issued against 21 firms.

PHARMABIZ.com