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SSIs in South Indian states left in the lurch as marketing cos going to North for contract manufacturing

Peethaambaran Kunnathoor, Chennai
Wednesday, December 28, 2022, 08:00 Hrs  [IST]

Responding to the comments of the pharmaceutical manufacturers in southern Tamil Nadu, Hyderabad-based pharma industry expert and former chairman of Telangana Drug Manufacturers Association (TDMA), J Raja Mouli has said all the south Indian pharma companies are now in an abandoned state as most of the marketing companies are going to north India for contract manufacturing, leaving the local small scale units in the lurch.
He further alleged that as the quantity of products coming from north India to south is increasing, the number of Not of Standard Quality (NSQ) drugs being reported by authorities is also increasing in south Indian states.
As far as Telangana and Andhra Pradesh are concerned, while the number of manufacturers has decreased to 30, the number of marketing companies has gone up beyond 10,000. In every district in Telangana new marketing companies are emerging day by day and newer combinations are launched and marketed at lower prices. The marketers engage in business contracts with manufacturing companies in Himachal Pradesh, Uttharakhand and Sikkim. As a result, the local small scale units cannot survive, and even 20 per cent of their installed capacity cannot be utilized. The markets are flooded with medicines, but their qualities are in question in most cases, he feels.
Talking to Pharmabiz, Mouli said the percentage of drug samples being declared as NSQs by the controlling authorities is increasing in almost all the south Indian states because of outsourcing from north Indian companies. He said there are some good companies who bring out quality products. But the majority of the products marketed in the south are coming from the north, so the majority of the NSQs are also found among the north Indian products. Whereas in the south, less production is happening, so less number of NSQs is reported, he commented.  
He said the marketing companies are introducing several new combinations to the market, which are not permitted in any of the south Indian states. The drug controlling authorities in the southern states are strictly enforcing the laws. The DCAs do not grant licences for new combinations as the Drug Controller General of India (DCGI) has directed all the SLAs to channelize licensing of new combinations through the DCGI office. The officers in the south are strictly adhering to the order, so no company is able to manufacture new combination drugs. But the marketing companies do not face such difficulties in obtaining licence for new combinations in north India.
“In each district of Telangana and AP, more than hundred marketing companies are operating businesses and none among them has any contract with a small scale company here. They prefer north Indian companies mainly because of low price and of the availability of new combinations. The licensing authorities in the southern states are not granting permission for new combinations, but ask the manufacturers to obtain it from the DCGI. But in the north, the marketers get licences for new combinations easily from the state drug control authorities. This encourages the marketers from Telangana, AP, Tamil Nadu, Karnataka and Kerala to tie-up with manufacturers in north India leaving their local players aside,” says the industry expert.
He said it is not fair to say that quality of products is compromised by north Indian companies. But there are some unprofessional people, who had no link with pharma industry or trade previously, have entered into the pharmaceutical business aiming for a huge profit. Their mode of operation has totally destroyed the existing set up and finally damaged the industry. Recently, the CDSCO alerted all the drug licensing authorities all over India to check the circulation of spurious medicines manufactured by a company in Baddi in Himachal Pradesh in the name of popular companies. Mouli said the government should have control over the marketers and the products they introduce into the markets in each state.


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