MSME Pharma Firms Fueling Public Health Crisis With Substandard Drugs, Data Shows

Pharmaceutical companies in India’s micro, small and medium enterprise (MSME) sector are manufacturing substandard drugs, according to data from the Central Drugs Standard Control Organisation (CDSCO).

As reported by ET, CDSCO’s data for April reveals that many MSME pharma companies are producing drugs that have failed safety and quality standards.

Under the ongoing regulatory surveillance, drug samples are collected from sales and distribution points and tested at government run laboratories.

In April alone, about 60 drug samples failed to meet the quality standards in April and got categorised as Not of Standard Quality (NSQ) Drugs, reported ET.

Drug Safety in Question

Several lesser-known pharma companies including Gidsha Pharmaceuticals in Gujarat, Martin and Brown Biosciences in Solan, Himachal Pradesh, Sai Parenterals in Hyderabad, Nestor Pharmaceuticals, Faridabad, etc., have been flagged for manufacturing drugs which which failed tests. These include carboxymethylcellulose sodium eye drops, an eye lubricant, bupivacaine hydrochloride injection, a local anaesthetic, calcium carbonate and vitamin D3 tablets.

"This has been the trend for some time now. Most of these MSME are found to be manufacturing drugs which are not of standard quality. That is the reason the health ministry came out with a notification which outlines standards for the pharma companies," said a person with knowledge of the matter told ET.

This is not the first time such findings have come to light. In November 2023, another ET report showed that over 65% of MSME manufacturers were found to be producing not of standard quality (NSQ) drugs during risk-based inspections of pharma companies conducted since December 2022.

"Out of the total MSME units inspected, 30% were issued stop production orders (SPO), while samples of 68% MSME companies have failed. This is alarming," another person with knowledge of the matter told ET in November 2023.

India's drug regulator had previously raised concerns about the need to revise the Good Manufacturing Practice (GMP) regulations and Quality Management Systems followed by pharmaceutical companies.

In August 2023, Union Health Minister Mansukh Mandaviya announced that companies with a turnover of Rs 250 crore and more will have to implement the revised GMP norms within six months, while MSMEs with a turnover of less than Rs 250 crore will have one year to comply.

On January 6, the Union Health Ministry notified revised rules under Schedule M of the Drugs and Cosmetics Rules, 1945.

According to Mint, MSMEs with revenue of less than Rs 250 crore are required to submit an application before the Central Licensing Authority by May 11, 2025 along with a plan of upgradation, to seek an extension for implementing the new GMP norms.

The Schedule M of GMP system was first incorporated in 1988 and was last amended in 2005. Schedule M outlines the regulatory requirements for drug manufacturing plants.