The small-scale drug manufacturers in the country have now approached the Prime Minister, Manmohan Singh, to apprise him of their problems remind their decisive role in the pharmaceutical business. SSIs were expecting the finance ministry to roll back the MRP-based Excise Duty regime but they think that it was unlikely to happen now.
SSIs feel that the decision makers were ignoring their interests for some time, and the industry organizations representing pharma industry had also not strongly supported their cause at crucial times, including in the present crisis.
The Confederation of Indian Pharmaceutical Industry (CIPI) has submitted a detailed memorandum to the Prime Minister, chronicling the series of policy decisions that went against them in the recent past including -the Schedule M mandate, the role of SSI pharma units in contribution to the society and price control of drugs, the possible after effects of the MRP based Excise Duty regime etc.
The move gains significance as the SSIs now feel the finance ministry is unlikely to reconsider its decision to implement Excise Duty based MRP, as it is estimated that the government will gain additional revenue of about Rs 4000 crore by the decision. Though some left wing MPs from West Bengal had brought the issue before the PM, the finance minister is learnt to have intervened to inform the PM of his willingness to slightly increase the abatement to about 42 per cent as a solution, aver industry sources.
One of the major demands of CIPI is also to ensure due consultations with the SSI industry leaders before taking any policy decision related to any department that are likely to affect the SSI pharmaceutical manufacturers.
Apart from impressing upon the Prime Minister, CIPI is also convening a mega meeting in New Delhi on 6, 7 of February, to be attended by Mahaveer Prasad, union minister for SSIs. CIPI leadership is in the process of ensuring participation of maximum SSI manufacturers from all parts of the country in the meeting. One of the major goals of the meeting is to mobilize support of the SSI ministry in influencing the government to ensure adequate representation for CIPI in the various committees formed by the government as part of the decision making process. Further, the meet will act as a platform to debate and raise concerns, mainly the excise issue. In a first of its kind act since its formation two years ago, CIPI is also convening a major press meet as part of the Delhi meet, to highlight their grievances among the public.
CIPI leadership feels that so far the other industry organizations, except for OPPI, have not supported them much in the present crisis. As reported by Pharmabiz, CIPI had even accused IPA responsible for lobbying with the government to implement the MRP based excise regime.
Though CIPI and IDMA had consulted each other to raise a common agenda in the crucial meeting convened by the ministry of chemicals and fertilizers on January 24, 2005 to find a solution to the various issues plaguing the pharmaceutical-pricing segment, both associations raised different demands at the meeting. While CIPI demanded an increase in the ceiling of excise duty exemption given to SSIs from the current Rs 1 crore to Rs 3 crore and a Preferential duty of 8 per cent instead of the 16 per cent for bigger units, for generic drugs and branded generics (subject to a ceiling of Rs 10 crore), the IDMA and other organizations lobbied for increase in duty abatement, Pharmabiz had reported this week.
CIPI leadership feels the other industry originations have been pushing their own agendas during crucial policy meetings for sometime and a 'small lobby' influences the government decisions, mostly favouring only the interest of large-scale manufacturers and multinationals.
It is interesting to note the formation of CIPI itself was a fall out of an earlier crisis, when the SSIs realized the industry organizations did not adequately pressurize in getting extension to Schedule M deadline earlier.