Small and Medium Pharma Companies in Need of Government Support to Upgrade Technology

Posted on June 16, 2011 by

The Small and Medium Pharma companies are looking for government support to upgrade technology to increase efficiency in manufacturing, marketing and brand promotion in the domestic and export markets. According to the pharma manufacturers association, the pharma industry is facing pressure from marketing and regulatory constraints.

In India, around 10,000 pharma companies are manufacturing bulk drugs and formulations. Out of these 10,000 manufactures, around 7,000 are SMEs, which contribute to over 35% of the total domestic turnover of Rs. 45,000 crore.

MNCs operating in India and Indian companies have many opportunities in contract manufacturing. These are looking for outsourcing manufacturing activities for the domestic market and focus on exports to regulated markets like the US and Europe. The contract manufacturing is almost 30% i.e., Rs. 15,000 crore and it is growing by around 20%. This growth is more than industry growth rate. But these SMEs should have technology upgradation and capabilities to comply with manufacturing standards like Good Manufacturing Practices (GMP) which are set by Indian government and the World Health Organisation (WHO). To produce the products with these standards, SMEs need financial support from the government.

Indian government has implemented financial assistance programs like the Credit Linked Capital Subsidy Scheme (CLCSS) for upgrading the technology of SME pharma companies to enable them to comply with GMP standards with the revised Schedule M norms under the Drugs and Cosmetics Act.

The government also announced 5% interest subsidy for SME to upgrade their facilities to WHO and GMP standard under Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS). Following these standards will help the industry to export their products to a large number of countries that have accepted the WHO standards for manufacturing and marketing medicines. Despite the above measures taken by government, the SME pharma manufacturers are of opinion that, all the developments in the exports can be made only when the government helps in providing finance to the SME pharma companies with low interest rates and without high collateral security.

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