The Department of pharmaceuticals is considering to exempt the small scale drug units with a turnover of upto Rs.10 crore from the provisions of price control in order to provide a relief to them from financial crisis they are undergoing because of the introduction of Schedule M and MRP-based excise. This facility will be applicable to such units which are operating under the MRP-based excise regime.

According to sources, the Department is seriously thinking of making this exemption in the wake of increasing costs of raw materials imported from China which has been putting most SSIs under immense pressure for some months now.

Even though the pharma associations representing the SSI units have been running from pillar to post for a suo-moto upward revision of prices of formulations, the NPPA refused to heed to the demand of the industry and sought each individual formulator to approach it for individual product. As this is a cumbersome process and it is virtually impossible for pharma SSIs to adhere to, the SSI units are compelled to either follow the price fixed by NPPA or abandon the formulation, sources said.

Meanwhile, the SME Pharma Industries Confederation (SPIC), a confederation of SSI pharma units, has demanded to the government to exempt the SSIs up to Rs 10 crore turnover from the provisions of price control, especially units who operate under MRP-based excise, which is a deterrent on higher MRP.

In a representation made to the new pharmaceuticals secretary Ashok Kumar, SPIC secretary general Jagdeep Singh said that it is unfair to equate SSIs with large industry which is more resourceful.

Urging the government to come to the rescue of the SSI units, the SPIC said that the plight of SSIs is already miserable due to Schedule M compliance and MRP based excise, which has been aggravated by the sharp rise in prices of APIs due to short supply from China.

If NPPA can decide price reduction on the basis of information on decrease in cost of RM and/or PM or import cost reduction due to rupee appreciation, the same yardstick should be applicable for increase in prices of formulations. The issue is extremely serious, particularly due to the fact that SSIs are using commonly used APIs, most of which fall in the scheduled category, it said.