The Union Health Ministry is planning to set up a central procurement agency to bring more transparency and efficiency in its dealing, even as the pharmaceutical department is set to take up the issue with Railways and other agencies on hiking the turnover limit for participating in the purchase bids.

The small scale sector, hit badly by the recent revisions by several agencies like Railways and state governments like Haryana, is hoping for a better deal under the central procurement agency. The small scale players were also planning to move the Competition Commission in this regard. Pharma department sources said they were seized with the matter and would be writing to the Railways and other concerned agencies to convey the apprehension of the small scale sector.

Transparency, equitability and competitiveness will be the parameters in the procurement policy being planned by the ministry. At present, different departments under the government have different norms for purchase of drugs and small scale units are the worst-hit due to this. A central procurement agency is likely to remove some of the woes as uniform norms will be in place, health ministry sources said.

The Central government departments reportedly buy drugs worth Rs 2000 crore a year while the orders by State government are worth another Rs 1500 crore for various healthcare programmes. But many of the agencies like Railways and state governments like Haryana have revised the norms slam the doors on small scale units, by raising the criteria from Rs 3 crore turnover to Rs 35 crore turnover as qualification to take part in bids. As per the new policy of the Railways, drug companies with a turnover below Rs 50 crore cannot participate in the tenders. The companies having turnover from Rs 50 to Rs 150 crore can supply maximum 25 products. Those with turnover between Rs 151 crore and Rs 500 crore are eligible to supply upto 50 products. The companies with turnover from Rs 501 crore to Rs 1,000 crore can supply upto 75 products while those having turnover above the Rs 1,000 crore marks can supply all products.

Recently the Left parties have called for change in government drug procurement rules that only allow the big players to place bids.

Recently, state-owned steel maker SAIL changed the tender criteria, allowing only the top 100 drug makers to bid for supplying tablets and the leading 200 companies for supplying injectables. Railways also changed its tender rules, preventing the smaller players from participating in the bid process, they said.

Large companies bag orders from the government at prices that are 3-4 times higher and then get the drugs manufactured by small companies at lower prices, thus fleecing both the government and the public.

Government policies promote the camouflaged agenda of multinationals and large-scale pharma companies against smaller players, the Left alleged.