At least one thousand pharmaceutical units in the small scale sector will be eliminated from the business map of India by Mach-April 2005 due to lack of business from government supplies, if the Central Government decides against further extension to revised Schedule M from its present deadline of 31st December 2004, it is feared.

According to informed sources, majority of the SSI units are likely to fail in the eligibility criteria mandated for participating in various state level government supplies, mainly Good Manufacturing Practice (GMP) certificate to be produced for participating in the tender process. So far, most of the state drug controllers, who are lenient towards the SSI units in their region, used to issue GMP certificates to help them participate in the annual tender processes.

With the revised Schedule M norms mandatory from 1st January 2005, the DCs may not be able to issue such GMP certificate as done earlier, and the units will have to produce the revised Schedule M complainant certificates to the tender authorities. Most of the State Governments completes the annual purchase process for drugs and medical items during the start of a new financial year. Now all states mandate quality certifications for participating in the tender process, and in some cases, WHO-GMP certification.

If the government is of the view not to extend the deadline, revised Schedule M non-complainant units (the majority of SSIs) will have to close down from 1st January 2005, technically. However, most of them are likely to face trouble only during the time of their next license renewal period, as it is happening at present in Kerala in the case of non-Schedule T complainant units. In the case of a good number of units, the next renewal is only by 2007. It is also impractical on the part of the state drug control mechanisms, which faces severe manpower shortage, to immediately hunt for non-complainant units and force hem to close down. In this scenario, the units have every chance to be in the ventilator for some more time.

However, inability to participate in the tender process will cause imminent closure of majority of the units, as 90 per cent of the SSIs are solely dependent on government supplies, note sources. A source pointed out the closure facing units would be forced to operate for some more time, 'at least clandestinely', as the lenders and bankers would pressurize them to pay back their commitments.

Meanwhile, the SSI industry leaders still nurture hopes of getting further extension to Schedule M, following a few recent unconfirmed reports quoting the union health minister hinting on a move to further dilute Schedule M norms. The Confederation of Indian Pharmaceutical Industries (CIPI) leaders are likely to meet the union health minister Dr. Anbumani Ramadoss within the next fortnight, as a last round effort to get further breathing time. The CIPI leadership had represented their grievances directly to the minister during the IPC, Kolkata.