Indian SMEs need Gov support to comply with GMPs; report

In-pharmatechnologist, June 14, 2012

The Indian Government must better support modernisation efforts at small businesses to boost GMP compliance, a report found.

In India, particularly in rural areas, there are small and medium-sized enterprises (SMEs) that play an important role in local healthcare but lack the funds to meet GMPs (good manufacturing practices). The Government has offered technical support but the steps for financial backing are facing criticism.

“There is need to simplify the procedures for providing financial support to the SMEs. With enhanced technical upgradation and financial capacity, the SMEs will be able to lower these market barriers and gain easy entry”, Natasha Nayak, a trade analyst, wrote in a Government-supported report.

Financial support offered to small businesses comes with very high collateral demands, Nayak wrote, and as such many smaller biopharma companies are unable to afford the package. Making support available to more businesses would help India continue to improve its reputation for quality drugs.

This, in turn, would keep India competitive against other emerging biopharma manufacturing hubs. China is moving to strengthen its GMP policies and Nayak notes that Brazil and South Africa already have higher quality standards than India.

Over the past decade the Indian textile industry has benefited from a Technology Upgradation Fund Scheme, which has distributed financial support worth billions of dollars, and the biopharma sector now wants similar backing.

“A representative from Indian Pharmaceutical Association has recommended that government needs to take on modernisation and upgradation schemes in the manner that it did for textile sector”, Nayak wrote.

Bulk drug pricing

The report also covers the controversial changes to drug pricing controls the Government proposed last year. Under the new plan the Government would end price controls for bulk drugs but some are wary of the consequences.

“Decontrol of bulk drug manufacturers might lead to increase in the prices of inputs while keeping control over the formulations. [This] might reduce the margins and further promote anticompetitive behaviour and collusion along the value chain”, Nayak wrote.

Despite this caveat the industry is broadly supportive of the ending of bulk drug price controls. The comments sent to the Government generally focused on the expectation that the ending of bulk drug price controls will help cut reliance on imports from China.

Adam Bianchi, chief operating officer at Cutting Edge Information, told in November: “Older price controls have been blamed for the decline of bulk and API (active pharmaceutical ingredient) production in India and the rapid ascent of Chinese bulk manufacturers.”

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