The Indian pharmaceutical industry has demonstrated capabilities not only in the country, but also abroad. From 1947 onwards even soda mint tablets were imported from M/s Boots UK. Things took a rapid turn after the Hathi Committee recommendations. The changes also reflected in the North Indian pharmaceutical industry, which took off in the late 50's.
The pharmaceutical industry can be broadly divided into various sectors such as bulk drugs/active pharmaceutical ingredients (APIs), formulations, medical devices and large parental volume products. In the north zone all these four sectors are prevalent, but formulation industry is the main force as it houses excise exemption states like Himachal Pradesh and Uttaranchal. In fact, North India has more or less sufficient capacity in formulations to meet the entire demand of the country.
With the reduction of excise duty from 16 per cent to 8 per cent, some units which had shifted over to excise exempt states have returned to their old base due to economical and administrative reasons. The notification of Schedule M has affected most of the small scale pharma units. Some of the industry players feel that schedule M and other provisions are designed to kill the competitiveness of small scale pharma units in India.
The industry in North India whole heartedly endorsed the panel provisions for manufacturing, dealing in superior medicines. The thrust of the government should be for quality medicines at affordable prices as per UPA government programme, and not how the product is being made as guided by developed countries for India. This gives rise to misinterpretation of the vaguely worded schedule M act, where there is no bench marks specified against which the compliance of schedule M can be measured.
The pharmaceutical industry in North India feels that once schedule M is in place, the government of India should make it a bench mark for quality medicines all over the world in close associations with China and South American countries.
The countries like USA and the European union has their own inspection procedures for import from any country and the units in India, who wish to export to these countries could upgrade their facilities to meet those countries' import requirements. But in name of this, the vast population of India, China, Africa and South America should not be subjected to any standard above the schedule M, as there is no evidence on record that changes made by developed countries has improved the quality of medicines significantly and remained within affordable means of the public.
Pitted against the big players, the small scale pharmaceutical sector across the country in general has been on a struggling path. North is no better. While thousands of small units either shut down their operations or facing the closure across the country, there is only a handful left outside the excise free zones in the North India to fight for existence now. Almost 75 per cent of the small scale units have moved to comparatively safer havens of excise free zones now. There were at least 300 small scale industry (SSI) units in Haryana, but now only 50-60 are left. In Delhi, there could be just 30-40 SSI working now. So is the case with Punjab, where once there were 500 units. It now has hardly 50 units. Majority of them moved to free zones, while others faced the logical end of their struggle - premature deaths.
In 1970s and 80s, Delhi and its outskirts were leading hubs for the pharmaceutical industry, mostly led by small scale and medium players. Then slowly biggies emerged and captured the grounds, while some existing big units diversified. Though the inland container depots helped the small players to grow for some time, struggle continued for them as big players captured the markets fast. Even in the small scale sector, formulation segment have come up better, while the bulk drug manufacturing is to reach the potential.
The small scale pharma units should now come under the umbrella of organisations like SME Pharma Confederation (SPIC) to fight the designs of the multinational and large scale units. Intense lobbying in government is required to remind it not to fall prey for the designs of various delegations of developed countries to influence our national interest and make sure that the competitive prices of India is not lost on account of their demands of huge financial investments in shape of infrastructure changes, plant and machinery, documentation etc, which require funds.
The government of India has yet to put into place pharmaceutical technical upgradation fund (PTUF) and in light of this, provision of schedule M implementation should be given more breathing time. The formation of Department of Pharmaceuticals is a welcome step. It is hoped that the competitiveness of Indian medicines is maintained by policy and fiscal decisions and the future of small scale pharma in North India could get a boost, if the government comes out with nil duty on medicines marketed as per pharmacopeial names, as it was earlier in the 1980's. It will make sure that the consumer has the choice of purchasing a medicine and not the doctors and the chemist of branded generics.
(The author is the managing director of Delhi-based Pharmchem)