Indian Drug Manufacturers Association (IDMA) is planning to approach the Competition Commission of India (CCI) over the turnover criteria insisted on by certain pubic sector undertakings and state governments while inviting tenders from the industry. Such practices amount to discrimination against small scale drug units by curbing their chances to win the bids.

IDMA has collected details of turnover criteria prevailing with the CPSUs like Indian Railways, Steel Authority of India (SAIL), South Eastern Coalfields Ltd (SECL) and state health departments in Jharkhand, Chhattisgarh, Maharashtra, Rajasthan and Uttarakhand.

Many of the qualifications sought to apply for these tenders are uncongenial for the small scale units and a certain amount of medium scale pharma companies, which rely on the government supplies to survive, say industry bodies.

The Indian Railways has put a minimum turnover criteria of Rs 50 crore as a qualification to apply for its tenders for medicine supplies, even as the SAIL bid norms restricts its tender to be from the top 100 companies as per the ORG IMS data. The SECL has made it mandatory for its bidders for medicine supplies to comply with the World Health Organisation's (WHO) Good Manufacturing Practice (GMP) standards.

In order to supply medicines to the health departments of the five state governments, the drug manufacturer should file a Certificates of Pharmaceutical Products (CoPP) along with the application for each products in the bid. Such qualifications pose as a barrier in medicine tenders and are restricting the legitimate small scale manufacturers who has GMP compliance from the Indian drug regulator from even entering the bid, alleges a senior IDMA official.

“It is logical to impose standards for medicines these organisations purchase. But, here, putting up CoPP and WHO GMP as criteria to supply drugs in local market doesn't make any sense. We have requested the DCGI to inform these parties that the revised schedule M is the preferable qualification for supply of products in India. We have also sent a letter to the CCI chairperson with a request to review on this trade practice,” said S V Veeramani, chairman, Small and Medium Enterprises (SME) Committee, IDMA.

He added that the association is testing the grounds and may move an appeal to the CCI to consider such practices as unfair and attempt to impose monopolistic trade practices. “We are waiting for the reply from the DCGI and the CCI chairperson for our next course of action,” he said.

Industry bodies representing small and medium scale pharma units in the country have been requesting the CPSUs and the state governments for long to withdraw such turnover criteria for qualifying to quote for government tenders.