India turns to small manufacturers for state-run generic supply biz

Minister of State for Chemicals and Fertilizers Hansraj Gangaram Ahir

The Indian government has revealed details of its plan to establish itself as a supplier of low-cost, high-quality generic medicines. Instead of relying on the big beasts of Indian generics production such as Dr. Reddy's and Sun Pharma, the government is to source its drugs from small and medium-sized players.

Minister of State for Chemicals and Fertilizers Hansraj Gangaram Ahir committed to working with small production shops during his first speech at a regional GMP workshop, Business Standard reports. The government's decision to source up to 500 drugs for its network of 3,000 stores from the minnows of the industry could provide a big boost to smaller businesses, which will potentially gain a client with an almost insatiable hunger for cheap medicines.

However, the reliance on a large patchwork of small manufacturers plays into some people's fears about the venture's ability to ensure the quality of the medicines it provides. The Bureau of Pharma Public Sector Undertakings of India has set procurement guidelines and plans to continually test samples of the products, but monitoring the network will become harder as more companies begin to contribute medicines. Working with smaller manufacturers means a larger network is likely.

The flip side of the strategy is that the government is unlikely to become too reliant on any one plant, an issue that dogged earlier attempts to establish a state-run generic drug supply operation. Jan Aushadhi--the name for the government's scheme--began in 2008, but its dependence on a handful of state-owned public supply units has hindered its attempts to reliably supply medicines. Casting the sourcing net wider should alleviate this issue, while admittedly creating some new problems.

A lot is resting on the success of the initiative. If India gets it right, it could provide a fillip to the local drug production industry while also improving the availability of low-cost, high-quality medicines. The government is advancing the program in parallel with its push to increase API production, which is intended to make the country less reliant on Chinese imports.

- read Business Standard's article
- check out Pharmabiz's piece

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