Implementation of revised Schedule M rules, an uphill task for small pharmaceutical companies

A notification of the revised Schedule M rules by the Ministry of Health and Family Welfare has evoked mixed reactions from the pharmaceutical sector and industry observers.

While the industry has welcomed the revision of the rules, several analysts said implementation and compliance could become a challenge for smaller pharmaceutical companies.

Schedule M of the Drugs and Cosmetics Rules specifies good manufacturing practices (GMPs), which aim to ensure the quality of medicines manufactured in the country.

The revised GMP rules come after several international incidents came to light in which Indian cough syrup and eye drops were found to be counterfeit and contaminated.

Nikkhil K Masurkar, CEO of Entod Pharmaceuticals, spoke about the need for GMP reforms and said improving GMP standards will bring the industry on par with global standards.

It will improve drug quality standards and help India promote itself as the global manufacturing hub for generic drugs. “Currently, there are around 10,500 drug manufacturing units in India. Of these, only 2,000 units meet the GMP guidelines of the World Health Organization in India. This makes such a change necessary. But the implementation of the revised standards should be done gradually, through a transition period, so that the industry can better prepare and plan,” he added.

However, analysts pointed out the difficulties that micro, small and medium enterprises (MSMEs) may face in implementing and complying with the revised rules.

Nirali Shah, analyst at Ashika Group, said implementing the revised GMP guidelines could be quite a challenge for MSMEs as it would require a hefty investment for infrastructure upgrades.

“Compliance costs increase production costs, which can put small players at a competitive disadvantage,” she said.

Terming these issues as short-term challenges, Shah said adhering to these standards is essential as we saw several cases of drug recalls and contamination complaints last year. Some of them were even highlighted by the World Health Organization (WHO).

“The bottom line is that the industry must balance these hurdles while ensuring compliance as this is important for the country's long-term reputation,” she added.

The Central Drug Standards and Control Organization (CDSCO), along with state drug inspectors, conducted inspections last year as part of a nationwide crackdown on counterfeit and substandard drugs.

The notification of the revised rules mandates all companies to implement them within six months to a year, based on the company's turnover.

Large companies, which have an annual turnover of more than Rs 250 crore, will have to implement the guidelines within the next six months.

Medium and small manufacturers, with an annual turnover of less than Rs 250 crore, will have to implement the revised rules within a year.

First print: January 7, 2024 | 6:32 PM IST