The small scale pharma manufacturing units in Madhya Pradesh need government’s urgent interference for a sweeping overhaul of these dying units, or else the few remaining companies in the state will also cease to exist shortly, said Dr S B Rijwani, secretary, Indian Pharmaceutical Association (IPA), MP branch.
Concerned over the lacklustre attitude of the state government towards addressing the problems faced by the SSI sector, the MP Pharmaceutical Manufacturers Association, supported by IPA, is planning to submit a mass representation to the government demanding immediate measures to save these dying SSI units, which are the only remaining pharma companies in the state.
In an interview with Pharmabiz, Dr Rijwani said until a few years ago, the state had more than 300 pharma units, which has now decreased to less than one hundred. The defective pharma policy of the central government and the apathy of the state government towards the sector are the major reasons for the closure of many of them. He alleged that only because of the central government’s faulty policy, the units could not compete with those in the tax free zones.
Development of tax free zones in neighbouring states has hit the SSI units in Madhya Pradesh like a bolt from the blue. The only way out was to develop such zones in MP and introduce incentives and rescue measures to save the drug manufacturing companies from their present crisis, he said. He further said a lot of pharma industrial units from MP have migrated to tax free zones in Himachal Pradesh and in Uttarakhand and expanded their business. Had the state government taken such steps, the units would have expanded in MP and more job opportunities would have been created.
Emphasizing the major contribution of the units, Dr Rijwani pointed out that the SSI pharma sector alone supplies 60 per cent of the total medicinal requirements of the state, but they are now on the verge of closure due to the indifferent attitude of the governments at the centre and state. Unless the government of Madhya Pradesh changes its drug purchase policy, the SSIs cannot last long. Government is giving no price preference to the units or introducing any incentive package to bolster the struggling industry, Dr Rijwani said.
Another aspect for the closure of the industry is the stringent norms in the Drugs and Cosmetics Act, which instead of boosting, is thwarting the growth of the small scale sector. The act demands for implementation of GMP and GLP as mandatory factors for all the units and the rigid penalties for non-compliance force the units to stop their operations. This situation worries the sector very much, but the government is still in a lackadaisical mood rather than acting supportively. There are some SEZ areas in Madhya Pradesh, but they are utilized by major players like Lupin, Cipla, Glenmark Generics, Mission Pharma etc. by setting up their divisions. No SME is able to do exports from MP because they are unable to compete with the big players.
“The state government has no ideal project to bolster the pharma industry, it is averse to the SSIs, whereas they take pleasure in supporting big IT players like TCS, Infosys etc. We are now approaching the government requesting them to take care of the SSIs in Madhya Pradesh. We will demand the government to change their drug procurement policy. They are procuring medicines from open tenders without giving any preference to local manufacturers. The government can support in so many ways including supply of raw materials through loan licence scheme. Despite several representations, there is no regard from the government to the state industrial units which give jobs to hundreds of people,” said the state IPA secretary.
The closure of the manufacturing units has adversely affected the hundred and more pharmacy colleges in Madhya Pradesh. For training purposes the colleges send the students to the industries in Mumbai, Bengaluru and Ahmedabad. Every year the state creates 600 graduate pharmacists.
“No industrial unit is coming to MP, No CRO is coming. Only some export oriented units are coming to the SEZ areas to take advantage of them, but no benefit for the local units which have to pay 1 per cent entry tax for all kinds of raw materials and packing materials. The distribution expense is also high as for the SSIs,” Dr Rijwani told Pharmabiz.