The Department of Pharmaceuticals (DoP) is formulating a multi-pronged strategy to boost the Small and Medium pharma Enterprises (SMEs) in the country for a five-fold growth size of at least US$ 40 billion by 2020 from the US$ 8 billion at present.

According to sources, the department is presently engaged in formulating a multi-pronged strategy as part of the 12th Five Year Plan to boost the SMEs as it has understood the importance of the SME sector in pharma industry in the country. According to available estimates with the department, about 40 per cent of the total US$ 40 billion pharma production in the country, ie US$ 8 billion, is contributed by the SME sector. The role of SMEs becomes very important as the sector is also doing contract manufacturing for large MNCs and large Indian pharma companies.

Senior officials in the DoP are of the view that this shows the potential of the SMEs and accordingly DoP is targeting that the SME pharma should grow to a size of at least US$ 40 billion by 2020. The DoP is targeting to grow the Indian industry to US$ 100 billion by 2020. Thus, a five-fold increase has to be made in the growth of the SME sector in the next 10 years. For this a multi pronged, integrated strategy is being envisaged by the DoP which has already started efforts to tweak several subsidy schemes to make it industry friendly, sources said.

The first is to increase the number of SMEs from the present number of about 10,600 to some 20,000. The second is to increase the average value of production from these SMEs to about US$ 2 million per unit from the current level of about US$ 0.7 to US$ 0.8 million. The Indian pharma market has to grow at 17 per cent to reach a target of US$ 100 billion by 2020 from the current level of US$ 20 billion.

As part of the strategy to assist the SMEs in this regard, efforts are being made by the union health ministry to strengthen and support State Laboratories by providing necessary equipment, etc. for standards testing. The ministry is currently in the process of working out methodology in this regard.

Further, a proposal for setting up of 8 new Central Labs, 12 mini labs at airports and seaports and 20 mobile van testing labs is being considered by the health ministry. In addition, a CDSCO training academy is also under consideration. Further, there is a proposal for connecting all labs of CDSCO electronically. Currently, there is a proposal of Rs.15 crores for strengthening state laboratories on cost sharing basis between central and the state governments as a central scheme. However, ratio of cost sharing percentage between centre and state is being worked out. In addition, health ministry is also planning to set up India country offices in China, Brazil, USA and Africa, etc.