The introduction of barcoding is still raising dust. The implementation of the second and third phases of barcoding has hit a roadblock as the Madras high court, which had stayed the implementation  in December last year, is yet to take up the issue for hearing.

Hence the union commerce ministry will not be able to implement the second and third stages from July 1. Moreover it is understood that  the commerce ministry did not file the counter affidavit to Madras high court so far and the chances of the case coming up for hearing in the near future are dim.

In January this year, after the intervention of the court, the commerce ministry had extended the implementation of the second and third phases of barcoding by six months, that is from July 1 this year.  As per the commerce ministry's notification dated January 10, 2011, barcoding was to be enforced in the country in phased manner from October 1 last year.  The trace and track technology has been made compulsory for tertiary level packaging from October 1 last year and that on secondary level packaging was to be made compulsory from January 1, 2012 and the new system was to be made mandatory on primary level packaging from July 1, 2012.

But, just less than two weeks before the union commerce ministry's mandatory implementation of barcoding on secondary level packaging was to come into force from January 1 this year, the industry moved Madras high court and on December 19 last year the court stayed the second phase of barcode implementation for the pharma exporters in the country.

The case against barcoding implementation was filed jointly by Confederation of Indian Pharmaceutical Industry (CIPI) and Indian Drug Manufacturers Association (IDMA). Delivering its order on December 19, the Madras High Court had ordered the union commerce ministry to maintain status quo on the issue of implementation of barcoding for the pharma exporters till January 6.  Though the court was to hear the issue in January itself, it did not take up the issue so far, leaving the government with no option but to maintain status quo on the issue.

Ever since the commerce ministry issued a notification on January 10, 2011 rolling out its plans to implement barcoding for pharma exports, the industry has been on warpath against the ministry's decision. In fact, the industry has been running from pillar to post to convince the commerce ministry officials to see reason as they argued that the implementation of barcoding on secondary level packaging will entail a string of regulatory, technical as well as cost issues which will harm the pharma exporters in the country.

But, the industry's repeated pleas to defer the barcode implementation fell on the deaf ears of the officials of the commerce ministry, forcing the industry to turn to the last resort of moving court.

Asking the authorities to see reason, the former president of Indian Drug Manufacturers Association (IDMA), NR Munjal in a letter to the DoP had pointed out  that in countries which don't have any trace and track requirement, Indian trace and track guidelines can be implemented only after their acceptance of these guidelines. Till that time, products exported to such countries should be exempted from requirement of implementation of trace and track requirements.

Asking the authorities to examine the regulatory, technical and cost implications of the implementation of bar coding on secondary level packaging, Munjal in his letter said that regulatory approval required from each country for change of artwork to incorporate 2D barcode must be duly considered.

Regarding the technical issues involved in the implementation of bar coding, Munjal said that manufacturing in India is carried out on high speed machines giving very high output in a short lime. The speed of 2D barcode printers will not be able to keep up with the speed of manufacturing machines resulting in slowing down of manufacturing process. This results in long production time and increased cost.

Besides, many Indian companies are manufacturing products of foreign companies on contract manufacturing (neutral labelling) and such requirements of bar code are not stipulated by these companies. Exemption should be given for such products as they are manufactured under the label of a foreign company.

Explaining that the cost burden due to the implementation of bar coding on secondary level packaging will be huge and unbearable to the industry, especially to the small and medium companies, Munjal asked the government to seriously consider fiscal support and incentive to cover the incremental cost of implementing the trace and track system such as the cost impact of 10p per pack and the productivity loss of 20 per cent. Besides, there is an additional investment of Rs.46 lakhs per packaging line; cost of registration with GSl Rs.20,000 per month apart from monthly cost of Rs.1,00,000 for bar coding accessories like inks etc. for an average SME.

From the cost point of view, the small and medium drug companies will find it extremely difficult to implement the track & trace system,he  said.

The industry had pointed out  to the DoP that if the barcoding is made mandatory in its present form, it would be tantamount to handing over thousands of crores of export business to China, just the way India lost the entire bulk drugs business to it due to the government's bad policies, as the implementation of barcoding would  not be financially viable to the small and medium companies here.

Proving its point, industry explained that an SME with exports of around Rs.15-20 crore would need to invest Rs.2 crore on barcode machines (one for each blister machine and one each for syrups and injections) and spend another Rs.1 crore annually on consumables like ink, etc, plus registration with GS1. This would make SMEs unviable for exports and hand over the market to China in case of generics and to MNCs in case of patented drugs.

Besides, the industry has apprised the DoP the futility of introduction of barcoding, which the industry termed as a 'fake solution to a fake problem'. The customers for affordable generics are third world poor countries who neither have computers nor barcode readers at each stage of sale which is essential to facilitate the mandated barcoding. Power condition is worse than India in these countries. And fakes is not an issue with them either.

Contesting the government's plea that the barcoding is being implemented in the country to check spurious  drugs, the industry said that the bar code technology is not fool proof.  It is possible for counterfeits to copy, create and use bar codes. If ATM cards can be duplicated, so can bar codes. Spurious drugs can also have bar codes, some of the industry observers  said.