The revised GMP norms as per the amended Schedule M of the Drugs and Cosmetics Act, 1945, have caused a stir among small-scale companies in the pharmaceutical sector. While some quarters claim the small-scale companies cannot comply with the revised GMP norms, there are some who claim the task is not impossible if every parameter is precisely controlled. In Tamil Nadu, small-scale companies hold the sway and the revised GMP norms have caused flutters. But fear that most small-scale companies will down their shutters because of their inability to comply with the revised GMP norms are being parried away. One of them who believes that small scale companies can turnaround and be able to comply with the revised GMP norms if they plan things accordingly is R Murugan, Managing Director, Cassel Research Laboratories Pvt Ltd. "It is not that the small scale companies cannot comply with GMP norms; they can. However, there needs to be a government initiative to help them attain the same, " he told K Santosh Nair of Pharmabiz.com in an interview.
It has been mentioned that the revised GMP norms will spell death for many small scale units, due to their being under financial strain and hence, their inability to comply with the norms. What do you say to this?
It is being said that the revised GMP norms will bring about the death knell of many small-scale companies. But according to me the fear is unfounded. It can happen and it cannot happen. The revised GMP norms cannot be attributed to their closure. I don't see many companies closing down because they are not able to comply with GMP norms.
I don't see reason why small-scale companies cannot comply with GMP norms. Agreed they are under financial pressure, but that does not mean they will not be able to comply with the GMP norms. I believe that every company can achieve it if they plan properly.
If you further look at the issue, there are many small-scale companies, which are adopting the GMP standards. The GMP norms are standards that are needed to have better quality of products and process. I am sure most companies would have taken it in this sense and not in the sense of some harmful policy being thrust upon them.
How do you think the small-scale companies can overcome the financial pressure they are currently in?
Obtaining loans from the banks has become a nightmare. Though there is a Reserve Bank of India (RBI) circular asking all the banks to extend financial assistance to small-scale companies without any collateral security the same is not happening. The banks are still asking for collateral security. The RBI circular has no meaning in this context.
It is true small-scale companies are undergoing financial strains. Competitive markets have only pushed them to financial pressure, and more pressure is being put on their financial situation. There is a need for a comprehensive strategy that can help small-scale companies obtain financial assistance. There is finance mismanagement happening but the situation that these companies are in right now is not of their own doing. The market has been competitive and margins have come down. This is telling on their financial position.
Some quarters have claimed that small-scale companies must now have fewer products and focus on brand building. What do you say to this?
Brand building is difficult for small companies in the present scenario. Nor can they have fewer products and go for brand building. With markets getting more competitive a basket of products will only help them. See, most of them go in for products of generic nature and not segment specific products.
Do you foresee small companies taking on contract manufacturing in the coming years given the fact that bigger companies are looking at outsourcing manufacturing of their products?
This is certainly going to happen. Contract manufacture will be the in thing in the near future. With financial strains showing on the bigger companies too, they would let the small-scale companies contract manufacture on their behalf. This is going to be viable for both the companies. If you look at it, multinational companies have always been contracting the manufacture of products. They are setting up base in the country and they would continue to do so. It is here that the smaller companies will see the advantage. It will not be surprising if you see smaller companies taking to contract manufacturing, while phasing out their own product manufacturing over a period of time.
The Tamil Nadu government has not come out with any specific policy aimed at the pharmaceutical industry. Do you think the government is supportive of the industry, the small-scale companies in particular?
The Tamil Nadu government has been supportive of the industry though it has not come out with any specific policy aimed at the pharmaceutical industry. It has not done much which means there is still more scope for it to do something for the industry. The Tamil Nadu government must take steps to see that companies in the state comply with the GMP norms, and accordingly make arrangements to see that these companies get the necessary finance.