Over 95 per cent of the pharmaceutical units in Karnataka should be ready to face the deadline of Schedule M by December 31 2003. But, the five per cent of units in the small-scale sector may not be able to comply with Schedule M on account of serious financial problems and the low level of operations.

"The pharmaceutical industry in the state prepared themselves in the last 12 months to gear up for Schedule M and constantly identified structural changes. There are only little chances of pharma companies closing down in the state," stated Jatish N Seth, secretary, Karnataka Drugs and Pharmaceuticals Manufacturers Association (KDPMA).

Out of the 240 units in Karnataka, 90 per cent are small-scale units. The drug-manufacturing units are 130 (70 formulations, and 60 bulk drugs) and out of these 70 have GMP certification as per WHO standards. Almost 10 per cent of the units which have not yet applied for GMP certification are bulk drug makers.

"In order to stay competitive, many small units have evaluated capital investments, joint ventures, strategic alliances and merger opportunities and have begun their efforts in that direction," said Seth.

The five per cent of companies are experiencing shortfalls in performance due to hasty production targets, weak marketing muscle and financial crisis. If the Schedule M deadline is extended, these companies could still survive, states N Vishwanthan and Ramesh Rajan, business analysts in the SSI sector

One critical aspect of Schedule M requirement is documentation and companies need the discipline and the will to maintain records, says Seth. It is vital to keep a tab on the day's input and output of jobs and just like one maintains accounts, documentation of the drug production is equally critical, he added.

Some of the other deficiencies in the companies to follow the Schedule M were lack of air handling systems, ancillary areas, refreshment zones, and validation procedures. "These are not difficult tasks to be achieved," stated RS Iyer, former head of quality control for companies like the erstwhile Parke Davis, Glaxo Pharmaceuticals.

There is no need to extend the Schedule M as most companies in the state have realigned their business plans to suit future requirements. The small-scale units have focused on the potential in global pharmaceuticals and have now revamped their operations to allow international and domestic audits to tap the outsourcing opportunities, stated members of KDPMA.

Meanwhile the state drugs control department is hopeful that units will take the deadline seriously because it is a challenge for both the department and the units to ensure compliance before the end of 2003.