Even as the Indian government embarks upon a series of emboldening regulatory initiatives to bring the country's drug regulatory system on par with the US FDA, at least a semblance of it, the initiatives have its own cascading effect on the country's thousands of small scale units which are fretting and fuming over the emerging regulatory scenario in the country.

Whether it is on the issue of weeding out irrational combination drugs; framing legislation to hand out severe punishment to the producers and marketers of spurious drugs; introduction of good manufacturing practices (GMP) and good laboratory practices (GLP); introduction of MRP-based excise collection; or the government's effort to bring in centralised drug licensing system, the beleaguered small scale sector has registered its strong protest over the government's initiative.

While the government's actions in initiating a string of policy makeovers stemmed from its longing to open up the window to the world, the conflicting interests have put both the big and the small Indian pharmaceutical industries on the opposite sides of the fence on several important policy decisions of the government during the last some years. Both of them have been at loggerheads ever since. And both of them have their own arguments to plead. "Around 5000 Pharma SMEs, producing around 40 percent of country's medicines of good quality and ensuring abundant supply in remotest parts of the country for 40 years, are in government made crisis. Several new laws shall decide the course of pharma industry and prices of medicines in India in times to come", said Jagdeep Singh, secretary general of SME Pharma Industries Confederation (SPIC) which has, of late, been overwhelmingly active in taking up issues with the government on behalf of the small industries in the country.

The biggest issue that evoked strong criticism from the small scale sector was the introduction of GMP in 2005 which virtually forced thousands of small players to throw in the towel as the financial burden to implement the GMP was well nigh beyond the capacity of the small sector units.

Another major government policy which had an adverse effect on the small sector was the introduction of MRP-based excise collection in January 2005, supposedly introduced to increase government revenue and bring down drug prices. But the inherent anomalies increased excise burden manifold, prompting the industry to migrate to excise free zones of Himachal Pradesh and Uttarakhand. The government's decision to weed out irrational combination drugs also brought the small sector on its knees as many of them have been surviving on some of the combination drugs over the years. There are thousands of combination drugs in the market and most of the small scale units have been manufacturing them as their mainstay business. After more than one and half years, the government is yet to resolve the issue which, the small sector alleges, is taken to finish off the small sector in the country.

The recently passed Drugs and Cosmetics (amendment) Bill, stipulating stringent penalties like life imprisonment and non-bailable arrest for manufacturing and marketing spurious drugs, also evoked sharp reaction from the small sector units which termed the government action yet another step to wipe out them from the pharma map of the country.

Other government policies which were frowned upon by the small sector included the introduction of good laboratory practices (GLP), formation of central drug authority (CDA) and the government's efforts to toe the line of WHO in giving a new definition to counterfeit drugs.