‘Government may consider offering higher depreciation benefits’

Pharma export associations should act as a facilitator in setting up warehouses in Asian, Latin American and African countries by providing high subsidised rental fees via a scheme by partnering with the Government of India. This shall facilitate exports of goods without incurring high logistics costs. Presently, costs of logistics account for as high as 40 per cent of the total cost of producing any pharma product, say industry players. This will be great boost to SME pharma exports.

Opportunities to co-market and co-promote products for major pharma companies in India pursuant to the amendment in patents in India should be encouraged. Necessary cheap easier financial assistance for implementing the measures under the Schedule M to the Drugs and Cosmetics Rules, WHO-GMP and other international norms relating to good manufacturing practices should be provided.

Best initiative or scheme to encourage MSME

• Workshops should be conducted by the Government to disseminate information on various dimensions related to new Schedule M requirements.
• Training should be ensured for small scale firms in auditing and monitoring of quality systems.
• Speedy clearance of soft loans and subsidies for technical up-gradation and elimination of related bureaucratic hurdles should be ensured.
• The establishment of formal linkages between these firms and pharma research and educational institutions for technical up-gradation and know-how related to R&D and quality control. The Government has taken a step in this direction through the efforts of National Institute of Pharmaceutical Education and Research (NIPER) through the building of a specimen Schedule M unit and utilising the efforts of the institute to act as an intermediary organisation in providing technical support to small firms under the new regulatory regime.

Suggested initiatives

During implementation of Schedule M, certain parameters can be modified for SME players. For instance, room sizes and stores segments can be made smaller.

The chemicals and pharma should not be treated alike when it comes to pollution control measures, and therefore, pharma should be moved out of the Orange to the Green category.

Class I and Class II tier cities could be developed as pharma clusters, for which there should be proper support by the government, by way of subsidies, tax cuts, etc. which will encourage more entrepreneurs to enter the pharma sector as SME players.

To encourage pharma units to invest in better technology and pollution equipment, the Government may consider offering higher depreciation benefits of say at 150 per cent. This will be an incentive where there is no outflow of money as in the case of capital subsidy scheme for the Government, but at the same time would encourage profit making units go for better technology and pollution control. This effectively uses the carrot instead of the stick method, where the Government offers incentives instead of punitive measures to upgrade.

Lack of awareness in the area of patenting of technology, Good Manufacturing Practices (GMP), Good Clinical Practices (GCP) and Good Laboratory Practices (GLP) is an issue with SMEs. The Government with the help of various pharma associations/bodies can conduct awareness camps for SMEs. SMEs should be well educated of the R&D that is conducted in the developed markets as there is adequate scope for contract research. Government support in this area will help pharma units to match the expectations of developed markets.

– BG Barve, Joint Managing Director, Blue Cross Laboratories