A large number of small and medium scale pharmaceutical units in the country may be disqualified from quoting for several government tenders, as the Directorate General of Supplies & Disposals (DGS&D) recommended to the Union Ministry of Commerce to hike the eligibility criteria for participating in its tenders from Rs 20 crore turn over to Rs 32 crore.

The DGS&D purchases involve huge quantities of drugs for Vocabulary Medical Stores (VMS), catering to a major share of civilian government health centres, Medical Colleges and hospitals across the country. Besides this, drug purchases are also made for Price Vocabulary Medical Stores (PVMS) to meet the medicine requirement of military arms and prisons under the Defence Ministry. The total purchase of medicine by the directorate is estimated to range more than Rs 2000 crore a year, industry sources said.

The move to raise the minimum turnover for eligibility to participate in government purchase tenders, is to smoothen the tender and supply processes of drugs by eliminating the units which are uncertain about their own production and supply capacity, it is learnt. Currently, the directorate has to rely on alternative supplies, as the supplies from small units turn irregular.

"It is learnt that the DGS&D has recommended the Ministry of Commerce to hike up the turnover criteria for government supplies. This is, for sure, detrimental for the small-scale pharmaceutical companies that rely on government requirements. We are seeking status quo to be maintained in this issue," B N Singh, president, Indian Drug Manufacturers Association (IDMA) told Pharmabiz. He also averred that the association would demand the government for relaxing its decision to purchase exclusively from Public Sector Undertakings (PSUs) and to include the small-scale pharmaceutical units also in the list.

"It is unfair to qualify a company with its criteria to determine its quality of products and service. Putting the criteria of track record for the companies in tender procedures as is being done by many state governments is acceptable. Anyway, we have decided to take up the issue with various departments in the central government," said a Small and Medium Entrepreneurs (SME)-committee official of IDMA.

Meanwhile, the Confederation of Indian Pharmaceutical Industry (CIPI) is planning to approach the government organizations individually to discuss the issue. The confederation will also present its demands and views to the DGS&D top officials and the officials from the Union Ministry for Commerce.

"This is a major problem to be faced by the SSIs and we are going to take up the issue seriously. It is the vested interest of a group of large scale pharma companies and some officials. The products included in the tender may have a price hike in open market later and it will not only affect the SSIs, but also the common man," said T S Jaishanker, chairman, CIPI.