Out of the exceptionally large number of the pharmaceutical production units in the country, it remains a fact that not more than 15 per cent would fall under the category of the 'organised' sector which mainly consist of large/medium sized companies.

It is also to be noted that these are the companies which have definite intentions of being in the business for in the coming years and they can compete with the multinational companies (MNCs). Needless to say anything separately for the rest 85 percent of the units who do not directly confront with MNCs. They can continue in business if they get themselves GMP complied and offer services as regional suppliers or operate as loan licencees or go in for a merger or an acquisition.

GMP compliance is an extremely simple concept to compare. When we refer to compliance, it means conformity to GMP norms prescribed at a local or global level. In some cases, units adopt minimum measures to ensure basic GMP compliance. For certain units, GMP norms are a process of continuous improvements in maintaining highest safety and quality production standards. When companies keep up such stringent standards in production, it will have a significant impact not only on the quality of the product but also on the cost of manufacturing, which eventually cuts into profitability.

From an MNC's view point, compliance to GMP is a mandatory requirement for all pharmaceutical manufacturing units. The MNCs would rather evaluate their production plants to be cGMP (current Good Manufacturing Practices) compliant for meeting international standards instead of mere GMP. Constant efforts are made to upgrade the manufacturing facility with the latest production technologies with a focus on total quality, safety and environmental standards.

There is a significant focus by MNC units on quality parameters, safety regulations, environmental controls during every stage of operation especially during the process of setting up the plant infrastructure.

It is difficult to assess, at this point of time, whether and how all the existing manufacturers will comply with the GMP norms or not in India with the extension for compliance deadline which is extended up to December 31, 2004. However , one can predict reasonably and accurately that the organised pharma manufacturers will work seriously to provide a viable, cost effective and quality conscious alternative to the MNCs.

It is these companies MNCS will have to watch for. The are well aware that the price competitiveness is the weapon available with them, if they were to compete with MNCs in the market. They would also be able to convince their product quality is comparable with the MNCs but still it comes at a much lower price. However, in such a situation, MNCs view the pricing structure differently. They examine cost of the product based on their quality standards and the continuous improvements in the production processes which provide the much-needed advantage with respect to safety and efficacy of the product.

The excellent standards maintained by Indian pharma companies should be looked at as a healthy competition. The aggressive market forces will place MNCs or Indian units in a situation of 'live and let live' and 'not let die'.

- (The author is Head-Production, AstraZeneca Pharma India Ltd. Bangalore)