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TN
SSI pharma: Boon or bane?
The
major problem with SSIs is that they have their fingers in every
pie. However, the associations representing the pharma companies
in the state are confident that if the right formula is applied
the day can be saved, finds Sneha Chrysolite Paul
THE
TN pharmaceutical manufacturers generate Rs 1800 crores every year
that contributes to seven per cent of the national turnover. SSI
units in the state contribute at least Rs 1000 crores. Many of these
companies have a total investment of a minimum of Rs 20-30 lakhs
to bigger SSI units like Fourtts, Apex and the like with at least
Rs one crore of investment.
Most
of these companies are formulations companies producing a minimum
of 30 products. ‘‘The main problem they face is lack of
focus. They have their finger in every pie,’’ asserts
T S Jaishankar, CMD, Chemech Laboratories and president, Pharma
Manufacturers Association (PMA). But for most of these entrepreneurs
it is a matter of having a pie to eat. This way, they say, if one
product does not sell they depend on the rest. All that they need
to pay for is to get the license from the government. Whether a
company produces one or a hundred formulations they now have to
revamp. To revamp the entire factory to GMP standards even the smallest
company needs at least another additional investment of Rs 30 lakhs.
This seems to be the catch for many SSIs.
Trouble
in Paradise
 Of
the 600 SSI units in the state only around 300 companies have regular
business throughout the year. Of these only around 40 companies
can be said to be doing well. That’s just a handful when compared
to the number of companies listed.
All
these small companies start with the dreams of B Pharm graduates
who are given the hope that they can start a company of their own
and survive. Though initial finance comes from family and friends,
debt increases in direct proportion to time. Now with new GMP regulations
more investment is needed. ‘‘The problem is that some
of these companies do not have money to pay their employees, how
would they have money to update themselves,’’ asserted
an expert.
The
two most pressing problems facing these entrepreneurs are finance
and marketing. Though these entrepreneurs are technically knowledgeable
they lack the capacity to market their product. ‘‘Most
SSIs look at short term marketing. They market their product through
distributors which in recent times is not very effective,’’
opined Veerramani MD, Fourtts India Laboratories, a successful SSI
unit and chairman TN branch of the Indian Drug Manufacturers Association
(IDMA).
Doctors
no longer prescribe medicines with the distributors word and thus
even a good product manufactured by SSIs get sidelined. Added to
this is the fact that no matter how united the SSI units maybe,
they lack organization. Being part of an association in TN is an
added advantage due to the sheer strength of the associations in
the state.
‘‘There
are so many formulations companies in the state. But we in PMA have
just 215 members,’’ avers B Sethuraman, Hon secretary,
PMA. The sad truth is that despite many interventions and requisitions
by the associations many hundred companies have not come forward
to register themselves. This leads to lack of representation of
SSI units to the government.
The
Tamilnadu Medical Sciences Council (TNMSC) spends around Rs 100
crores on drugs each year. There are so many SSI units in TN from
which the TNMSC can purchase the drugs. But unlike states like Karnataka,
Kerala and Andhra Pradesh, the pharma manufacturers in TN do not
get a preference. ‘‘It is very sad that we have to be
alienated everywhere,’’ stated a manufacturer, ‘‘if
we go to other states, their manufacturers get preference, and in
our state they get preference as well.’’
Since
SSIs require less capacity they are forced to buy the raw materials
at a higher price. Ask them the problems they face, the list seems
endless.
Hope
still burns!
But
‘Try and Try again, you’ll succeed at last,’ is the
belief of all SSI units in the country. Or at least of the associations
who represent them. The IDMA, PMA and the Indian Pharmaceutical
Association (IPA) thrill every other industry by their unity. They
are now arranging seminars and personal guidance to SSI units that
approach them. The PMA is paying experts and consultants to give
free guidance and counsel to the member SSI units. The associations
have also represented the issue of preferential purchase by the
TNMSC to TN manufacturers.
‘‘We
in the PMA would like the TN government to give a preferential purchase
to the TN pharma companies. Of course we need to make sure that
the manufacturing standards are maintained. If a tender is released
we could help the government in asking TN manufacturers to match
or come down to the level presented by a manufacturer from another
state,’’ stated Jaishankar. This way if at least 50 out
of the total Rs 100 crores goes to the TN SSIs! Then the status
of the industry in the state will vastly improve.
Tips
from the experts
Most
of the experts interviewed believe that if the right formula is
made and if the SSI units are able to follow the formula there is
hope for every one. ‘‘India is a vast country and there
is opportunity for everyone,’’ asserted Veeramani. He
opines that the MNCs who come will leave gaps for the SSIs to fill.
‘‘The MNCs are not going to look at manufacturing tablets
for TB or malaria. They concentrate more on cardio-vascular diseases
and psychiatric illness.’’ If the SSI units start focussing
on areas like ayurvedic product and rural marketing they would survive.
SSI
units looking to improve can upgrade in areas of:
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Layout hygiene equipment
-
Quality assurance air control systems
-
Invest in marketing.
If
the suggestion made by the CII to pass the ‘Small Enterprises
Development Bill’ is passed then SSI units could avail the
benefits from local banks and the technology banks that could be
created. Visiting the local associations offices would help get
proper guidance on the exact steps to be taken. This way the SSI
units would only be a boon to the society
and the state.
Excel
in unity, fail in focus
FORMULATIONS
is the word that most SSI units in Tamilnadu are accustomed to.
Statistics reveal that there are approximately 600 SSI units operating
in varied parts of the state. Visit the Ambattur estate or the Pharma
Complex in Alathur and you’d find a cluster of SSI units intertwined
with each other. ‘‘It is great to see that unlike any
other state, the SSI units in TN are united,’’ stated
the PMA president T S Jaishankar, also asserting that these companies
are so united that each company knows what the other is doing.
Amidst
the cover of trust and protection has crawled in the requirements
for standard GMP levels that have to be maintained. Will these happy
go lucky SSI entrepreneurs survive? ‘‘Yes! I firmly believe
so,’’ says S V Veerramani, MD, Fourtts India Laboratories
and chairman TN branch of the IDMA.
But
not all experts think so. One such industry expert who did not want
to be quoted told Express Pharma Pulse that the state of the SSI
units in the TN was very bleak.
Maybe
so but the associations representing the pharma companies in the
state are confident that if the right formula is applied the day
can be saved.
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