Pharmabiz
 

LIFTING UP THE SMEs

P A FrancisWednesday, July 20, 2011, 08:00 Hrs  [IST]

For several years small and medium scale enterprises in pharmaceutical industry were branded as producers of spurious and substandard drugs with drug control officials filing cases against them for various violations. Certainly there were quite a few small units indulging in such activities but that is not the case with the majority of the units today. Over the years, a large number of SMEs have turned responsible adopting good manufacturing practices and exporting products to developed and developing countries. The main problem with SMEs is their poor financial and marketing capabilities. If that can be effectively addressed by the government they could eventually take up the responsibility of catering to the needs of country's domestic market. Almost 80 per cent of the domestic market is currently controlled by 25 large pharmaceutical companies and prices of most of the drugs marketed by them are beyond the reach of common man. The Department of Pharmaceuticals has been trying hard to bring some check on the prices of essential drugs as NPPA has not been successful in controlling prices of over 500 drugs marketed in the country. It seems the  Department has realized this could be possible only by giving a major push to the SME sector. DoP is thus working on a project to give a big boost to the SMEs as a part of the 12th Five Year Plan. As per its projections, about 40 per cent of the estimated US$ 40 billion pharmaceutical production can be contributed by the SME sector. A major part of the activities of SMEs is rather invisible as they do a lot of contract manufacturing for MNCs and large Indian pharma companies. Most of the top selling brands of MNCs and large Indian companies are actually manufactured by the SMEs but marketed by these big ones. This shows the hidden strength of the SME sector. The Department wants the SMEs to grow to a size of at least US$ 40 billion by 2020 when the Indian industry attain a production level of US$ 100 billion by that year. Thus, a five-fold increase has to be made in the growth of the SME sector in the next 10 years. DoP’s move is particularly significant at a time when leading Indian pharmaceutical companies are being taken over by MNCs and the number of patented drugs in the domestic market is steadily rising. In a situation like this, SMEs should be made responsible to come forward to produce quality drugs for the common men at reasonable prices. This is possible for them considering their lower manufacturing and marketing costs. However, what the Department has to ensure is that SMEs should not compromise on minimum quality of the drug products. Production of drugs should take place in factories with some basic prescribed facilities to ensure a minimum quality and safety standards as they are life saving products. There should be no compromise on this.

 
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