Thousands of small and medium pharma industries in the country have urged Prime Minister Dr Manmohan Singh to postpone the implementation of Good Laboratory Practices (GLP) in the country till such time a level playing field is provided to entire industry in India and funds are provided and disbursed by department of pharmaceuticals (DoP) for the purpose.

Stating that the units in tax holiday states, who have been provided undue advantage, are the only ones at present who can afford implementation, the SME Pharma Industries Confederation (SPIC) secretary general Jagdeep Singh said that as the implementation of GLP involves massive investments, the government should come out with some schemes for financial assistance, besides providing a level-playing field between the manufacturers in the excise free zones and excise zones in the country.

The Union ministry of health had recently notified the Schedule L-I of Rules 74, 78 and 150 E under Drugs and Cosmetics Third Amendment Rules 2008 under which it is mandatory for the pharmaceutical industry in the country to comply the GLP by November 1, 2010.

The SPIC, in a letter to the PM, said that SMEs are not averse to implementation of GLP, but some changes like a level playing field is a minimum requirement unless the government wanted to hand over pharma manufacturing to the MNCs by closing down more SMEs. Out of around 7000 SME units in the country, roughly 1000 units were closed down including 285 units in Maharashtra and 90 in Haryana as a consequence of the implementation of Good Manufacturing Practice (GMP) in 2005. Our contention for long that the MNCs are behind this game plan is substantiated by their recent takeover of Indian companies. Six MNCs have already cornered 25 per cent Indian market. That price rise will be a consequence is well known,.

Detailing about the level-playing field, Jadeep Singh said that tax holiday states of Himachal and Uttarakhand were created in 2003 which provided them an advantage of roughly 10 per cent over the units in other states. But when MRP-based excise duty was levied in January 2005, the advantage was magnified to over 30 per cent owing to anomalies. Prime Ministerial intervention to remove anomalies was helpful to the extent that excise duty was reduced from 16 per cent to 8 per cent in Budget 2008 and subsequent reduction to 4 per cent in November 2008 by way of Stimulus. It may be clarified that excise rate may be insignificant but it gets magnified owing to anomalies which were not removed despite PM intervention.

The advantage of tax holiday states, especially excise free contract manufacturing of others' brands continues with the result that 70 per cent production remains with them. Consequently, the smallest trader is sourcing his brands at MRP of choice and indulging in bribing of doctor which has set a dangerous trend in recent years and nothing much could be done about it by the government, SPIC said.

It may also be pointed out that government is unable to provide Reference Standards to State Laboratories and to Industry which has been repeatedly pointed out by the industries. Investment in sophisticated instruments for upgradation shall only be a national loss, SPIC said.

“In view of facts stated above, we request postponement of GLP implementation till such time that: a level playing field is provided to entire industry in India; funds are provided and disbursed by DOP for the purpose; Reference Standards are made available by CDL, Kolkata; and data is generated to prove that Schedule M has improved quality”, SPIC in its letter to the PM said.