The clock has run out for pharmaceutical units under ₹250 crore turnover to comply with the revised Schedule M manufacturing standards, sparking industry-wide concerns over the survival of micro and small enterprises (MSEs) across India. The revised standards, notified by the Union Ministry of Health and Family Welfare on December 28, 2023, aim to align domestic drug manufacturing practices with international benchmarks but pose significant challenges for smaller players in the sector.

The Compliance Conundrum

Micro and small pharma units have had a year to meet the new standards, compared to six months for companies with turnovers exceeding ₹250 crore. However, many smaller units claim this timeline is insufficient, leaving around 8,000 MSEs vulnerable to closure. Jagdeep Singh, President of the Punjab Drug Manufacturers Association (PDMA), revealed that only 15-20 of Punjab’s 150 units have upgraded to meet the standards, highlighting the uphill battle faced by smaller players.

“If implemented without an extension, this regulation could wipe out a majority of micro and small units, not just in Punjab but across the country,” Jagdeep Singh warned.

Industry Appeals for Government Support

Industry associations, including the PDMA, have repeatedly urged the government to extend the compliance deadline. They’ve also highlighted other critical challenges, such as inadequate infrastructure, limited availability of skilled manpower, and the need for better access to potable water for manufacturing.

Sources suggest the Ministry of Health and Family Welfare is considering solutions, but so far, no concrete announcements have been made. Meanwhile, joint inspections by central and state drug regulators in December resulted in stop-production notices for units failing to comply with even the previous Schedule M standards, adding further strain to the sector.

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The Stakes Are High

The revised Schedule M introduces significant enhancements, including:

• Pharmaceutical Quality System (PQS)
• Quality Risk Management (QRM)
• Product Quality Reviews (PQR)
• Supplier Audits and Approvals
• Stability Studies
• Defective Product Recall Systems

While these measures aim to improve the overall quality and safety of domestically manufactured drugs, their implementation is expected to increase operational costs, potentially leading to a surge in drug prices, according to industry experts.

What’s Next for the Pharma Industry?

As the sector awaits a potential lifeline from the government, the stakes couldn’t be higher. The survival of thousands of MSEs and the stability of India’s affordable drug supply chain hang in the balance. Any delay in supportive policy action could disrupt the ecosystem, affecting suppliers, distributors, and healthcare providers.

For stakeholders in the Indian healthcare industry, the revised Schedule M represents both a challenge and an opportunity. Manufacturers, equipment suppliers, and compliance consultants have a pivotal role to play in helping the industry navigate these regulatory changes.

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