Lack of adequate marketing support from the state medical services corporation, complicated tender conditions put forward by it and shortage of working capital have been identified as the major reasons for the closure of a large number of small scale pharmaceutical units in Kerala, as per a study conducted by KMSCL Institute of Drugs Studies (KIDS).

KIDS has conducted the study to suggest proposals for solving the burning issues faced by pharma SME units in Kerala and to recommend them as the major sources of supply to government’s requirements. Currently, KMSCL is placing very few orders with the SMEs in Kerala and procuring major part of the requirements from north Indian companies.

Following representations from Kerala Pharmaceutical Manufacturers Association (KPMA) seeking remedial measures for their poor financial conditions, the government of Kerala decided to revive the ailing SME sector and wanted the KIDS to conduct a study on their present status and submit a report to the government. The report, which was submitted to the government last week, says that many small-scale units are on the verge of closure because of lack of marketing support and governmental aid.

The existing system of KMSCL to place orders with the companies on an yearly basis and with a time frame of 60 days for supply is difficult to be complied with by the units. People from the industry complain that in other states companies are getting half yearly and quarterly orders and supply time allotted is more than two months. Once an order is placed with a company in Kerala, the Corporation will further issue an order only next year. No company in Kerala is getting any order from other states, the report of KIDS says.

According to sources from KIDS, it has recommended to KMSCL that it should actively support the struggling small scale companies by way of procuring maximum quantity of drugs for its supply to the government hospitals. For manufacturing the products, the corporation should provide all the raw materials to the manufacturing companies by directly outsourcing them from outside. Since the SSI units are not financially well off to procure all the materials, the government agency must act as a service provider to the companies.

KIDS suggest that if quality raw materials are supplied by government, the SSI units can manufacture quality medicines for the government supply. The study says that the raw materials coming from foreign countries are lacking in quality when compared to the materials available in India. If good quality ingredients sourced from Indian bulk drug companies are supplied for manufacture, government hospitals can supply quality drugs to the patients. The Indian made raw materials have the shelf life of a maximum period of five years, the report says.

Sources said there are 93 registered pharma manufacturing companies in Kerala out of which only eight to ten are working well at present. And, these companies have also not utilizing their maximum production capacity for shortage of demands.

According to the study report, SME pharma units in Kerala deserve special care and support from the government agencies, especially KMSCL which has an important role to supporting them. So the Corporation must take into consideration the present situation in Kerala and do all possible help to revive them, KIDS wanted in the report.