Close on the heels of Indian Railways and some other government departments, the Haryana government has also revised the drug purchase policy, raising the annual turnover criterion for participating in drug purchase tenders from the existing Rs 3 crore to Rs 35 crore. The new policy will virtually deny the small scale drug units the opportunity to participate in the government tenders.

The government's new policy comes immediately after the government's decision to provide free medicines to all patients visiting government hospitals – right from district hospitals down to rural dispensaries all through the state. The SSIs in Haryana had volunteered to provide all the commonly used medicines at much cheaper rates than the popular brands to the Haryana government for this project if the government will source all the medicines from the SSIs. But, the revised drug purchase policy has left the SSIs in the lurch in the state.

According to senior Haryana health ministry officials, the decision to raise the turnover criterion for drug purchase was taken to ensure the quality of medicines as it is a matter of human health, there is zero tolerance for substandard drugs. At present, there is great concern about failing samples of medicines and the quality of medicines being supplied by smaller firms. Under the National Rural Health Mission (NRHM) scheme, the government has identified over 100 drugs which will be supplied through the five central public sector undertakings. Other drugs will be sources from outside for which the policy has been made strict.

Meanwhile, the SSIs in the state are fuming fire. They allege that big companies are behind the state government's decision as they wanted to eliminate the SSIs from the government drug procurement process.

It may be recalled that some months ago, the Indian Railways and other central government departments had also revised their drug purchase policy raising the turnover criterion for participating in government tenders. In fact, the Railways had raised the criterion to Rs 50 crore. So annoyed are the industry over the apathetic attitude of the government that it has sought the competition commission's intervention in the matter. The matter is now pending with the commission.