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Extension of revised Schedule M deadline fails to bring total relief to MSMEs
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Gireesh Babu, New Delhi
January 07 , 2025
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Even as the Union health ministry's draft notification to extend the deadline for implementation of revised Schedule M norms for the companies with turnover of less than Rs. 250 crore based on application has brought in an interim relief to the micro, small and medium entrepreneurs (MSMEs), they feel that the move is a little tricky and does not properly address the challenges faced by them in achieving the stipulated manufacturing standards.
The industry associations would be submitting their suggestions and objections on the draft notification issued on January 4, within the seven days provided by the Ministry for public comments, prior to the final notification.
The Ministry, while issuing the draft notification, said that in order to facilitate the upgradation of facilities of the MSME units they will be given three months’ time to register with the Central Drugs standard Control Organisation (CDSCO) and share the plan of upgradation with the central drug regulator. A total of 12 months' extension will be provided for such units, that is until December 31, 2025.
"After 3 months, an audit of these facilities will be conducted and depending on the status of implementation of the plan, action will be taken if the upgradation which has been committed is not being executed," added the Ministry.
According to the form provided with the draft notification, the units which apply for extension of deadline have to submit the details of section-wise gap analysis and plans and strategies for compliance with the revised Good Manufacturing Practices (GMP) based on the gap analysis, in three months’ time. The extension of time for implementation of the plan has to be not beyond January 1, 2026 and they should also provide justification of time required for compliance.
The gap analysis has to be on various sections including the plant, equipment, lab equipment, HVAC system, utilities, technical staff, documentation and others. The Ministry also said that representations have come from various industry associations representing pharma MSME sector for extension of this deadline and the main reasons for seeking extension are arranging for finances for upgradation and time for implementation of the required changes. Till date, CDSCO has inspected over 800 manufacturing units and 252 public testing labs.
"The observations from the units being audited and the feedback coming from stakeholders clearly shows the improvement on ground towards implementation of GMP standards by MSMEs. There is awareness and sensitization all around and there are good number of units which have initiated the upgradation process," said the Ministry.
Dr Rajesh Gupta, All-India Head of Laghu Udyog Bharati and State President of Himachal Pradesh Drug Manufacturer Association, expressed his gratitude on the decision to extend the deadline up to December 31, 2025 with certain conditions.
"As promised by Honourable Health Minister J P Nadda ji to Laghu Udyog Bharati, we obtained revised Schedule M extension with certain conditions at least for one year. Deeply grateful, to Hon'ble HM Sir, worthy secretary of health, Department of Pharmaceuticals and Drug controller General of India who considered industry associations request about extension," he said. He added that the industry will submit the suggestions on the draft notification within seven days to examine few compliances hurdles of existing units only, while units above Rs. 250 crore turnover and new industry falls under revised Schedule M fully.
The micro and small units under Punjab Drug Manufacturers Association (PDMA) feel that they may find it difficult to provide the gap analysis and moreover, a commitment to complete the upgradation within a year from now, considering various factors including the lack of funds and even lack of adequately qualified manpower to complete the technical jobs and documentation. Some of the associations had sought the government to provide at least three to five years for the MSMEs to comply with the revised standards.
Jagdeep Singh, president of Punjab Drug Manufacturers Association (PDMA), said, "Everybody is ready to upgrade, but the time period is too short, the manpower is not available, there is intra-factory competition affecting the margins, and there are no basic amenities including quality water for manufacturing." The Association held a meeting with its members and would continue to hold meetings in the coming days in order to submit its suggestions on the draft notification within the stipulated time frame.
The very idea of grouping all the MSMEs under Rs. 250 crore turnover into one category itself is faulty, considering that the micro units may be of a turnover of Rs. 3-5 crore and their capabilities and requirements might not be considered as the same that of a Rs. 200 crore firm.
"The documentation itself is a huge task and we don't have enough trained manpower to do that. Nine out of 10 B.Pharm students we come across in our recruitment process don't even know the basics and training them to conduct the operations itself would be a huge task and require time," said Singh. The smallest instrument in a manufacturing facility would be a Ph meter and many of the candidates cannot define Ph, standardise a Ph meter or use it properly, he alleged.
SME Pharma Industries’ Confederation (SPIC) has earlier sought the government to give at least five to ten years' time along with various supports from the government to comply with the standards, and warned that a rash implementation would result in closure of thousands of MSME pharma units in the country.
The Ministry, while extending the deadline, on January 4, said that there are around 10,500 manufacturing units in the country out of which around 8,500 fall under MSME category. India is a major exporter of medicines to low- and middle-income countries (LMIC) which require World Health Organisation's (WHO) GMP certification. Currently there are around 2000 units in the MSME category in the country having WHO GMP certification.
The revised GMP standards would bring India's GMP recommendations and compliance expectations at par with global standards, especially to those of WHO, and ensure production of globally acceptable quality of drug. The new Schedule M was notified in December 2023. In order to have smooth transition from the present Schedule M to revised Schedule M, it was decided to provide a transition period of 6 months and 12 months for large manufacturers (above Rs. 250 crore turnover) and MSME (below Rs. 250 crore turnover) respectively and the notification was published on January 5, 2024.
Accordingly, Central Drugs Standard Control Organization (CDSCO), in collaboration with States/UTs, chalked out an aggressive nationwide plan for stakeholders to make them aware about the new Schedule M including its requirements, importance and technical justification, resource availability etc.
"Till date CDSCO has completed 15 awareness sessions at different cities and manufacturing hubs. 36,855 attendees have attended these sessions in hybrid mode and these have been received very well by industry, specially MSMEs. As per the notification, units with annual turnover of >Rs. 250 crore were to comply to revised Scheduled M standards from 1st July, 2023. For units with annual turnover of <Rs. 250 crore (MSMEs), the date of implementation of revised Schedule M is 1st January, 2025," said the Ministry.
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