In Need of Renewed Focus

Pharma MSMEs will miss the Make in India bus unless they upgrade to global norms. But industry stalwarts point out that the government needs to do more to help them move up to the next level. By Usha Sharma

‘Industry needs financial assistance from the government’

In India, pharma SMEs have been started by several entrepreneurs with either pharmacy background or experience in pharma industry. It reflects their entrepreneurial spirit and creative urge to achieve something credible in the Indian pharma industry. Several SMEs in the past are now large companies with international presence.

Pharma SMEs in India are continuously growing at different levels and they can take us to a bright future of the Indian pharma industry. Hence, it is very important that adequate support and nurturing of SMEs should take place to safeguard the future of the sector.

Pharma SMEs require support for the following:

• Technology upgradation: SMEs require technology upgradation fund to upgrade their plants and meet the increasing global requirements. As they may not receive funding from venture capitalists, Government of India needs to support this through a technology upgradation fund. Although the intention of the government to support SMEs is genuine, it is not reflected in adequate funding for the SME sector. The government feels that the Credit Linked Capital Subsidy Scheme (CLCSS), which was earlier announced is meeting the funding for small sector. But, unfortunately, this scheme is not active and almost redundant. Recently, the government has come with a proposal of Rs 500 crores to help the medium sector, but not the small sector. It is important that this funding should be enlarged not only to medium but also to small sector. It will also be not adequate considering the huge funding required by around 7000 pharma SMEs in India.
• Training: SMEs require training on GMP practice and skill development. IDMA has been doing its best to conduct seminars on ‘Schedule M & Beyond’ at various venues in India with the help of Department of Pharmaceuticals (DoP). We understand that the Central Drugs Standard Control Organization (CDSCO) is also considering GMP training for SMEs in various parts of India, in order to upgrade Schedule-M. We also need to step up our activities in training on skill development, since India will require a huge number of skilled people to meet the future requirements of the industry. Life Sciences Sector Skill Development Council (LSSSDC) is in the process of setting standards for various cadres and they focus on the skill gaps.
• Supplies to institutions and hospitals: Recently, the government has come out with the proposal that 20 per cent of the procurement of pharma for Central government institutions has to be taken from the MSME sector. It is a welcome step and will help MSMEs to use their idle capacities. Further, this needs to be extended to purchases from the state governments. It is also important that turnover clause is not stipulated in government tenders, so as to allow a free participation by all SMEs. The turnover clause of Rs 20.00 crores and above, have been denying opportunities for SMEs
• Exports: SMEs can develop their plant to WHO-GMP standards and above and they have a huge opportunity to supply to many countries of the world. Hence, SMEs need to be sensitive to export requirements. Atleast, 1000 more exporters can emerge from SME front.
• Contract manufacturing: With improved plants and expertise, the SMEs can also be contract manufacturers to national and multinational companies. This will be very timely considering that India will be emerging in a big way in Contract Research And Manufacturing Services.
• CEO training: The CEOs of pharma SMEs can be given special training on exports, costing, finance management and the importance of R&D and technology.

– SV Veerramani, President, IDMA

Our journey towards global Regulatory Standards

Over the years, the posture of both the government, regulatory as well as WHO have been changing and it is noticeable. The government wants to disburse amounts to the identified needy organisations. Regulatory authorities like the CDSCO along with WHO wants human resources to be trained through some skilled development programmes.

DoP has been undertaking programmes all over the country to train and upgrade pharma individuals in the area of GMP and GLP etc. WHO has come forward to train the regulatory inspectors with the right training to carry out necessary auditing of companies. All these parameters are loaded with the objective of creating a viable industry in achieving the global objectives of good quality medicines, to be produced from every unit in this country and thus, qualify to supply medicines globally.

We still feel a well channelised approach by all state FDA authorities along with the Central Drug Authority and DCI with a definite time line. The following points should be kept in mind in order to strike the right chord in showing a great improvement.

• Identify prospective companies for upgradation, state wise. They may take the assistance of associations like IDMA, or local associations or federations to help in identifying
• Filter out the training needs of personnel and train them to develop the necessary skills
• Help these companies to get their capital input needs by influencing the nodal banks to do so
• Upgrade the existing machinery profiles so as to provide the right mix of inputs to achieve quality goods
• A clear hand holding approach for a specific number of years is needed to achieve the said ‘quality parameters’ in the industry through friendly regulatory inputs into the system.

It is very pertinent to say, here, that on one side the Centre is interested to set WHO GMP goals in the industry and at the same time, it is crippling the activities of the companies by introducing price controls and squeezing the margins of the manufacturers. One can see the dilemma here, asking for improvement in the infrastructure but, simultaneously, asking for reduced margins and reduced prices. We do not know how many companies can survive this type of manoeuvre by the government. It is indeed a tight rope walk for the companies to satisfy the government, regulatory authorities and also, the people of this nation, at large. Ultimately, it is survival of the fittest. Let us hope that circumstances change, by which an amicable approach is brought in by the government, bankers and regulatory authorities to keep the pharma flag flying high. The government in recent times has been reiterating that the pharma industry in this country is second, only to the IT industry in terms of economic growth. Incidentally, in the recent Indian Pharmaceutical Congress (IPC) 2015 held in Mysore, the Cabinet minister, Ananth Kumar mentioned in his keynote address, that very soon, there is a plan to moot a separate ministry for pharma. The Central Health minister, JP Nadda has pronounced that after looking at the active pharmaceutical ingredients (API) situation, they are contemplating announcing incentives for manufacturing of APIs. It is high time that all these pronouncements take shape at a rapid pace in order to develop a good road map for a robust pharma industry

– SR Vaidya, Past President, AISDMA , Chairman, SME Committee, IDMA and, Director, Bliss GVS Pharma

‘A scheme similar to TUFS for textile should be given to the pharma industry as well’

Till 2000, the pharma industry underwent a technology upgradation every 10 years. Since 2000, this period has reduced to five years. Due to increased competition from the neighbouring countries, it becomes more empirical to look into this aspect since Indian pharma provides the world with finished product formulations at very competitive prices. For the industry to cope with onslaught of technology upgradation and maintain its competitive edge, a scheme similar to Technology Upgradation Fund Scheme (TUFS) for textile should be given to the pharma industry as well.

The scheme specifically should target:

• Promotion of pharma industry, a sunrise sector, for export and employment.
• Promoting conversion of existing non-WHO units to WHO-GMP accreditation and for improvement in quality and productivity.
• Promoting conversion of existing WHO-GMP units to US FDA/ MHRA accreditation
• Encouraging better productivity and yield improvement by WHO-GMP units by installing latest technology machines.

– Bhavin Mehta, Director, Kilitch Drugs India

Proposed Revision of SCHedule M will be beneficial to
understand and Implement GMP in a Transparent Way

There is a necessity to revise Schedule M (GMP norms) of D&C rules. Good Manufacturing Practice (GMP) is essential to maintain the ‘quality’ of medicines. It is a dynamic process and norms should be revised from time to time with advancement of good practices.

It was first incorporated in 1988 in Schedule M of D&C Rules to enhance the quality of pharma products manufactured in India. However, due to the directive of National Human Rights Commission, the Schedule M was revised in the tune of GMP for pharma products prescribed by WHO for the member countries vide WHO TRS 823 and gazette notification was made by MoHFW
(Department of Health) on December 11, 2001.

WHO upgraded TRS 823 version to 902/ 908/ 961/ 986 with a number of supplementary guidance documents during the last decade. ‘Orange Guide’ — the GMP norms followed by MHRA have been revised eight times since its first introduction in 1971. PIC/S guidelines on GMP are revised every year. Following are the major gaps between Schedule M of D&C Rules and WHO GMP Norms.

Quality management

• A Pharmaceutical Quality System (PQS) [which specify that the top management should bear the responsibility to ensure that the products manufactured are complied with the requirements of the manufacturing license and do not jeopardise the health of the patient due to inadequate safety, quality or efficacy of the product] is not mentioned in Schedule M and requires to be incorporated in the tune of WHO TRS 986, Annex-02.
• Quality Risk Management (QRM) [which is a systematic process for identification, assessment and control of risks to the quality of pharmaceutical products across the product lifecycle] is not mentioned in Schedule M and requires to be incorporated in the tune of WHO TRS 986, Annex-02.
• Product Quality Review (PQR) [which is an effective quality improvement tool to enhance the consistency of the process and the overall quality of the product] is not mentioned in Schedule M and requires to be incorporated in the tune of WHO TRS 986, Annex-02.
• A definition of Good Manufacturing Practice (GMP) and its contents should be defined clearly in the tune WHO TRS 986, Annex-02.

Personnel

• Details of duty and responsibility of key personnel like head of production, head of quality control and head of quality assurance should specifically be stated in Schedule M as described in WHO TRS 986, Annex-02.
• Details of training to be imparted to all employees engaged in manufacturing and quality control activities at the time of induction as well as ongoing including maintenance of records should specifically be stated in Schedule M as described in WHO TRS 986, Annex-02.

Equipment

Installation, qualification and maintenance criteria of equipment require to be stated more elaborately in Schedule M as described in WHO TRS 986, Annex-02.

Manufacturing operation and control

• More emphasis for prevention of contamination and cross-contamination is required and accordingly these criteria should be prescribed more elaborately in Schedule M as described in WHO TRS 986, Annex-02.
• Necessary safe guard requirement for environment as well as personnel protection is required to be incorporated more elaborately in Schedule M as described in WHO TRS 986, Annex-02.

Quality control

Although GLP is specified in Schedule L1 of D&C Rules, however, the requirement of the same should be incorporated in Schedule M as described in WHO TRS 986, Annex-02.

Contact manufacture and analysis

Although the provision of contract manufacturing is well covered under rule 69A and 75A, however, due to modern scenario of contract manufacturing industry in India, the clause of contract production and analysis should be incorporated in Schedule M covering all the points as specified in WHO TRS 986, Annex-02.

Specific requirements for manufacturer of sterile product (Part 1-A)

• More emphasis for sanitation is required and accordingly these criteria should be prescribed more elaborately in Schedule M as described in WHO TRS 961, Annex-06 (which is current WHO GMP Norms for sterile pharmaceutical products and was published in 2011).
• The criteria for sterilisation by radiation and gasses should be included in Schedule M as described in WHO TRS 961, Annex-06
• The criteria for process simulation test require to be included in Schedule M more elaborately as described in WHO TRS 961, Annex-06.
• The criteria to maintain cleanliness level throughout the processing operation during manufacturing of sterile preparation should be prescribed more elaborately in Schedule M as described in WHO TRS 961, Annex-06.

Guidance documents

WHO published various guidance documents to facilitate the manufacturers to understand clearly the basic elements of various GMP components and their implementation in proper way to assure quality, safety and efficacy of the product.

Some of examples are shown in Table 1

Such guidance documents are not available for the manufacturers neither under Schedule M nor under D&C Rules. In absence of such guidance documents, there is always a probability of different interpretations of the norms by various manufacturers as well as regulators.

Absence of these guidance documents are major gaps in Schedule M in comparison with WHO GMP guidelines.

In view of the above and considering developments in the field of pharma technology and increase regulatory expectation to improve the quality, safety and efficacy of the pharmaceutical products, there is a necessity to revise and upgrade the main principles and concept of GMP mentioned in Schedule-M in the tune of WHO TRS 986, Annex-2 & 961, Annex-6 (for sterile products) to fulfill international regulatory commitment.

The proposed revision will not attract more cost on infrastructure facility for the present manufacturing unit rather will be more beneficial to understand and implement GMP in a transparent and unambiguous way to ensure safety, efficacy and quality of the pharmaceuticals products. However, the cost may be involved to train human resources, prevent contamination/ cross contamination, maintain water for pharma use in constant circulation loop and provide terminal HEPA filter in a multiproduct OSD facility.

– Dr D Roy, Former Deputy Drugs Controller (India), CDSCO, MoHFW, Govt. of India

‘There is a need for a significant technology upgradation support to the MSME sector’

ASME plant, that could be set up in less than Rs 1 crore a decade back today requires about Rs 20-25 crores. Upgradation of existing facilities is highly capital intensive too, running easily into Rs 5-10 crores. Ancillary aspects such as HVAC, water systems and utilities are capital intensive. Stringent systems need to be in place to adhere to GMP thus resulting into higher running costs. Escalating manpower costs and energy costs are incidental. In a nutshell, both capital costs as well as running costs have gone up. For MSMEs, it is quite overwhelming to cope up to this. With limited profits and investment capabilities coupled with high market uncertainties and ever changing regulations, it is quite challenging for them to get motivated to invest more. Some experts believe that MSMEs will cease to exist in the pharma industry if this trend continues for another 10 years, as the threshold investment will be too much for new MSME entrants or even for the existing MSMEs to survive. Certain solutions can be considered:

Govt support subsidy

There is a need for significant technology upgradation support to the MSME sector. CLSS has its limitations that it gave too little (upto Rs 15 lakhs) and was too cumbersome. The need of the hour is a more comprehensive and industry- friendly scheme. The subsidy limit needs to be increased to Rs 5 crores with simple procedures.

Soft loans

Most of the financing required for MSME upgradation needs to be financed through debts. Soft loans with low interest rates, minimal collateral requirements and simple procedures are a must.

Business support

MSME may be given some preference in government procurement tenders. This could be either in terms of reserved products or rate advantage. This could help this sector get better mark ups which can be used to finance the upgradation.

Skill development

In line with the PM’s vision,

• The government needs to put in a large investment in skill development for pharma industry.
• Support from industry association and regulators FDCA and CDSCO can play mentors to MSME sector on how best to upgrade and still keep costs under control, where industry associations like IDMA and FOPE can facilitate this interaction. Regular training programmes and continuous education on GMP, involving the regulators and industry can go a long way to create a GMP complaint MSME industry.
• Initiatives from entrepreneurs and stakeholders MSME pharma industry has to brace itself to international norms. They have to accept that they cannot continue their business tomorrow with practises of day-before-yesterday. The first thing is to get away from fears and reservations. Many GMP compliance activities may not need a big investment. Putting good quality systems in place, internal training and maintaining data integrity are small but significant steps show their commitment to move forward. Many GMP compliance activities may not need much of monetary commitment, but can make a very contribution towards GMP compliance. The future of MSME sector is very bright. We need a bit of hand holding from all stakeholders, government, banks etc.

– Viranchi Shah, Vice Chairman- IDMA GSB, Chairman- National Council on Drugs & Pharmaceuticals- ASSOCHAM, Member- Foreign Trade Committee- GCCI