The small scale pharmaceutical manufacturers in Tamil Nadu are in a fix over the issue of preferential purchase price as the Tamil Nadu Medical Service Corporation (TNMSC) is continuing to ignore the price preferential purchase norms in its latest tender offer. The uncertainity is continuing for the last two months even as the small pharmaceutical manufacturers under the banner of the Pharmaceutical Manufacturers Association of Tamil Nadu (PMA) have appraised the Finance and the Health Secretaries of the state about the violation and error committed by TNMSC regarding the price preferential purchase norms.

The Tamil Nadu government has withdrawn the Government Order (G.O.) No 75 and amended the Tamil Nadu Tender Transparency Act 1998 enabling for purchase preference and 15 per cent price preference to state based companies. As per the norms all state undertakings, which procure products or items on behalf of the government had to follow the Transparency Act and adopt the price and purchase preference. TNMSC being the nodal agency for procurement of medicines, surgical items and the like also comes under the purview of the Act.

However, in its latest tender offer, it failed to adopt the norms thereby affecting the small pharmaceutical companies in the state, which had bid for the tenders. The tender offer was for 68 items worth Rs 47 crore. PMA President, T. S. Jaishankar claims that the TNMSC has not followed the Transparency Act in letter and spirit, and is acting on a negative note. He further maintains that TNMSC continues to choose units outside the state for supply violating the TN government intention and enactment. "TNMSC continues to be adamant and refuses to claim it has made a mistake," he added.

Surprisingly the violation has been committed by TNMSC when it has openly announced in its tender documents about the price and purchase preferential norms. Inspite of this, it had awarded contract to units located outside the state. "TNMSC does not come under the purview of the norms and it cannot go back on its stand," said Vijay Kumar, Managing Director of TNMSC when contacted by Pharmabiz.com.

PMA claims that TNMSC, in violation of the norms, has come out with two price lists for each product, one indicating the lowest price quoted by units outside the state and the other quoted by units in Tamil Nadu. The price quoted by the units outside the state are higher than that quoted by PMA members. PMA claims that even when the units in the state quoted lower prices that the price given by TNMSC the orders have been placed with units outside the state ignoring the price and purchase preferential norms.

PMA points out by doing so, TNMSC is making the state exchequer lose vital revenue. Further it points out that TNMSC is doing this inspite of the fact that the Finance and Health secretary have admitted to the fact that TNMSC did really make a mistake in the tender norms, a fact that is vehemently denied by Vijay Kumar.

Further, PMA points out that the 15 per cent price preferential will not add burden to the state finance with regards to its expenditure on health. It states that the Tamil Nadu government has allocated Rs 136 crore for the purchase of drugs and the like. The price preferential when applied would only make the government allocate a further Rs 3.7 crore on and above the Rs.136 crore already allocated.

PMA claims that the state companies have been made to suffer even when in the seven years history of TNMSC no units based in state were blacklisted for failing to execute an order. On the contrary, many units in the other state have been blacklisted on the same ground.