The recent changes in the top brass of the Tamil Nadu Medical Services Corporation (TNMSC), the drug procuring agency for the Tamil Nadu Government, has given hopes to local pharmaceutical manufacturers in defusing the long drawn out price preference tussle with the TNMSC.
The TN Government just brought in a new chairman, and a few months ago, a new managing director for TNMSC. With the next annual procurement for drugs and surgical items to come up only by March, next year, the pharmaceutical manufacturers feel efforts should be done early to solve the issue rather than waiting till next year to pressurize the government in the last moment to offer price preference. The TN PMA has formed a sub-committee last week to handle the price preference issue and to approach the TNMSC officials for obtaining a favorable decision, it is learnt.
"At present no legal cases are existing in between TN PMA and TNMSC, though a related case is pending involving suits filed by about eight individual manufacturers against TNMSC in the price preference issue. We wish the new authorities of TNMSC will heed to our problems and allow Tamil Nadu manufacturers get the price preference at least in the next year drug procurement," B Sethuraman, president of Tamil Nadu PMA told Pharmabiz.
Sources said though the Chennai High Court in its interim judgment a few months ago had ordered the TNMSC to ensure 50 per cent of drug procurement from the manufacturers based in Tamil Nadu with reimbursement options if selected in the tender process, it was not considered in the drug procurement process for this year.
Manufacturers point out that according to the Tamil Nadu Transparency in Tenders Act 1998, and amended by the Tamil Nadu Transparency in Tenders (Amendment) Act, Rule 29 (f), 'the evaluation and comparison shall include fifteen percent price preference for domestic small scale industrial units and ten percent price preference for the Public Sector Undertakings of the government in respect of products and quantities manufactured by them'.
However, the TNMSC was reluctant to consider the same in the tender process, despite repeated representations by the association. Responding to a PMA petition a few months ago, the High Court had directed the drug manufacturers to approach the TNMSC to get a clear clarification on the matter and had observed the court could not act on assumptions of the petitioner. Thereafter eight drug firms, which participated in the tender process, filed individual cases in the High Court challenging the TNMSC decision.
TNMSC purchases Rs 100 to Rs 130 crores worth drugs and surgical items annually, and a majority of the local manufacturers are dependent on the state purchases. Since TNMSC was not ready to consider the price preference and help the local units to offer business, many of the units were facing closure, according to TN PMA sources.