The small and medium scale pharma manufacturers are upset over the recent changes in the terms and conditions for procurement of medicines by the railways and termed it as another move to 'kill the small scale sector'.

Alleging that 'some vested interests' were playing behind the move, the small scale leaders have made representations to the railway minister Lalu Prasad Yadav and are trying to meet him personally, seeking to rescind the amendment which deprived the small scale units of level playing grounds.

"This is all meant to kill the remaining small scale units also. First, there were no minimum turnover criteria for the units to participate in the tenders. It was then raised to Rs 20 crore and now they have hiked it to Rs 50 crore. This is unjustifiable and is a grave threat to the survival of small scale units," All India Small Scale Pharmaceutical Manufacturers Association president Vijay Arora told Pharmabiz.

According to the changed norms, the companies having turnover from Rs 50 to Rs 150 crore can supply maximum 25 products. Those with turnover between Rs 151 crore and Rs 500 crore are eligible to supply upto 50 products. The companies with turnover from Rs 501 crore to Rs 1,000 crore can supply upto 75 products while those having turnover above the Rs 1,000 crore mark can supply all products. railway board has asked the manufacturing units to get re-registered as per the new norms. The zonal railways have already intimated the same to the units.

Earlier there were no restrictions on the number of products that can be supplied by the small scale units. The railway procures roughly Rs 400 crore worth medicines every year and the small scale players accounted for 80 per cent of the supply, according to industry estimates. With the change of norms, it will be left to the monopoly of big companies, leaving no share to the small players, it is pointed out.

"By stipulating these conditions, the railway would be paying crore of rupees in excess and to the extent of 40 per cent higher price as the multinationals and large companies would be getting their products manufactured under third party arrangement from our member units as they do not have sufficient in-house manufacturing capacity for the turnover achieved by them," said SME Pharma Industries Confederation (SPIC) in a representation to the railway minister.

"We request you to kindly intervene and ensure that the railways do not fall into the trap laid down by the large pharma units to dupe the railways in such a procurement policy and order a through inquiry into this whole gimmick and ensure that level playing field is given to the small and medium pharma units in these tenders," SPIC urged.