Annoyed over the lackadaisical attitude of the central government on the issue of high turnover criterion for medicine procurement by various government departments, the small and medium drug companies have sought Competition Commission's intervention in the matter. The industry has pleaded with the Commission that the various government departments' recent decision in fixing high turnover criterion for participating in tenders for medicine procurement 'is against the principles of competition'.
Several government departments including the Indian Railways had some time back increased the turnover criterion for medicine procurement, virtually disqualifying the small and medium pharma companies from participating in the tenders for supplying medicines to these departments. As per the new drug procurement policy of the Railways, drug companies with a turnover below Rs 50 crore cannot participate in the tenders.
"It is not only against the avowed government policy of encouraging SME sector but is also against the principles of competition. We request the Competition Commission to take note of these anti-competitive practices and take action as deemed fit," the industry said in a letter to the Competition Commission of India.
The industry's exasperation on this issue is quite understandable as ever since the government changed the drug procurement policy increasing the turnover criterion, the drug manufacturers, especially the small and medium drug manufacturers, were running from pillar to post to make the government see reason. The industry's repeated far cry to amend the mistakes fell on the deaf ears of the concerned authorities. When the industry looked up at the government for an amicable solution to the issue, the government looked at the other way, as it is alleged to be under the influence of big players in the sector.
The industry appealed to the government to remove the Rs 50 crore turnover restrictions as that will tantamount to denial of opportunities to thousands of small and medium scale pharma units in the country who comply with strictest quality norms. It is of the view that purchase of medicines based on annual turnover of companies would on its own never guarantee quality. Turnover alone cannot guarantee quality of medicines when many manufacturers get their products manufactured from different factories and on contract from small scale and medium scale units.