The Confederation of Indian Pharmaceutical Industries (CIPI), the apex organization of small-scale drug manufacturers in the country, has appealed to the Government to enforce Schedule M guidelines mandatory only for new companies, which have been commissioned after 2001.

In its budget memorandum to Dr Anbumani Ramadoss, Union Minister for Health & Family Welfare, the Confederation pointed out that several representations were made to the ministry on this and many members of the Parliament had recommended implementing Schedule M guidelines mandatory only for new companies that have been commissioned after 2001.

Pointing out that it was necessary to allow more time for units to comply with the Schedule M guidelines. The present deadline of December 31, 2004 was set after constant pressure and repeated representations from the industry. In fact the industry sought a two year extension last year but the government extended the implementation time by just one year in the last minute before the earlier deadline. The authorities had then assured a further extension later.

The memorandum also noted that the Drugs Control General of India also had recommended certain dilutions in the norms, besides extension of time by 2 years. Further, the Dr Mashelkar Committee appointed to recommend suggestions to streamline the Indian drug industry had found out that only 10 per cent of the licensed units were able to implement the revise Schedule M norms. In this scenario, it was necessary to grant more time, besides making Schedule M guidelines mandatory only for new companies, said the memorandum.

In another pre budget memorandum submitted to Ram Vilas Paswan, Union Minister for Chemicals and Fertilizers, CIPI said the move to levy excise duty on MRP of drugs would affect the SSI pharmaceutical manufacturers in the country and hence the ministry should refrain from it.

While the move may generate additional income for the exchequer, the Small drug units will be badly affected by the move. The SSI sector has done capital investment of over Rs.7000 crores and employs over one million people directly and indirectly. Most of the units are mainly dependent on contract manufacturing and they will be straightaway affected and many units may face permanent closure.

Normally, SSIs are given contract manufacturing by larger companies mainly because of the benefits the larger units enjoy by way of excise on ex-factory prices. If this is not possible due to the new regulations with excise on the MRP, the larger companies will lose interest in outsourcing the SSI units, said the memorandum.