The Department of Pharmaceuticals is exploring the possibility of bringing in an e-commerce project to strengthen the small and medium pharmaceutical enterprises. The Department has prepared an e-commerce strategy for the purpose and has called for responses from SMEs.

The project is designed to meet the objective of strengthening the SMEs through development of an e-commerce portal, which will act as an e-market place addressing business-to-business (B2B), business-to-customer (B2C) and government-to-business (G2B) transactions.

The government will act as the trusted third party for the portal which will give tremendous confidence to various stake holders and customers of the sector, according to Devendra Chaudhary, joint secretary, Department of Pharmaceuticals who prepared the project design.

"Globally, there are a lot of activities going on in the pharmaceutical sector and the global product methods have developed much in the recent past. The project is designed to help the SME pharma sector in India to update itself in these fields," said Chaudhary. The project is just formulated and the department is seeking response from the industry on the strategy. Though primarily designed as a government funded project, there will also be a public private partnership model.

The SME players, who contribute 35 per cent of the country's pharma turnover, consist largely unorganized units in India.

The government initiative will help them reach out to markets, co-opt strengths of other SME players (which in turn will help them in executing projects more complex in nature), update them about various rules and regulations both for domestic as well as international markets and get larger business opportunities from India and abroad, states the strategy report. The project will also make retailers and wholesalers transact with these Pharmaceutical companies directly through the portal.

The project calls for setting up of an independent accreditation agency to monitor the portal, which will act as a platform for online exchange of orders. The project is envisaged to help the SMEs in standardization of the processes and documents for various end uses in the manufacture to delivery chain, and will bring in ease in the process of new product application for approval by adopting electronic uniform formats and submission as well as approvals on the net. Standardization of the regulatory issues for online payment for prescription as well as B2B activities and facilities to provide a single face for the pharmaceutical SME are the other objectives of the project.

The department will have the role in providing the electronic platform even as the project is designed as an industry driven initiative with stake of the industry in the establishment and operation of the ecommerce platform. The website is poised to attract the global players to post their requirements for outsourcing. This should act as a single point of information dissemination about various features (including prices) being offered by various pharmaceutical firms of SME sector, suggests the strategy report.

Further, the project will aim at reduction of entry barrier for entering the pharmaceutical industry by creating a level playing field for the SME pharma organizations by providing equally available transparent opportunities leading to both organic and inorganic growth. This will also reduce the mobility barrier between various existing strategic groups.

The accreditation agency is expected to rate all the SME pharma organisations based on their performance and customer feedback. The portal also have a potential to act as a platform for consolidation of supply side for the pharmaceuticals SMEs, which means, a manufacturer of a particular chemical used by the pharmaceutical firms would get lot of credibility (with lower transaction cost) and visibility among potential customer organizations.

A detailed execution plan for the project will be prepared only after receiving the response from the industry, said Chaudhary.